UK security forces - police, army and counter-espionage service MI5 - have been put on the second-highest state of alert.
Security has been upgraded from "substantial" to "severe general" though the move is reportedly unconnected with the three-day visit of US president George W Bush next week.
Security services have been on a heightened sense of alert following intelligence reports of a possible attack by Osama bin Laden's al Qaeda network.
The Home Office denies that any specific targets have been earmarked.
A report by the Control Risks Group business consultancy on Tuesday warned that London was a prime target for a suicide bomb attack by Islamic extremists.
The study concluded that there was a "serious possibility" of an attack.