The home secretary Jacqui Smith has said legislation is not the only answer to terrorism and instead the government must reach out to all communities.
Updating MPs on the current terror threat, Ms Smith insisted it is only through unity that terrorists will eventually be defeated.
However, the home secretary did not rule out the option of legislation and insisted it can be part of a coordinated response to terrorism.
"I certainly do not see legislation as being the sole way through which we will tackle terrorism," Ms Smith said. "I do nevertheless think it is a very important way".
Ms Smith confirmed the government would continue to push ahead with a planned counter-terror bill, put forward by her predecessor John Reid.
But she insisted the government would consult widely on the draft bill, hinting at a softening of some of Mr Reid's more controversial proposals.
In a highly conciliatory House of Commons, both the shadow home secretary David Davis and Lib Dem counterpart Nick Clegg praised the government's measured response to the terror attempts in London and Glasgow.
Mr Davis warned the government against undermining the British way of life in its efforts to defend it from terrorism.
While he said he was "very pleased" Gordon Brown and Ms Smith had not responded in a hasty or knee-jerk way so far, he said the Conservatives would not support too many infringements on Britons' civil liberties.
Mr Davis said: "We should remember that the liberty of the subject is the defining characteristic of the British way of life. So it should not be given up without very good cause indeed."
The government had risked criticism after it emerged security forces had no advance warning of the attacks and Mr Davis pointed to reports that JTAC had been warned the handover between Mr Brown and Mr Blair posed a particular risk.
Ms Smith insisted the Joint Terrorism Analysis Centre (JTAC) had not been complacent in maintaining a "severe" threat level until it was raised to "critical" on Saturday.
JTAC has to assess a vast body of information, Ms Smith said. Moreover "severe" should not be seen as a routine threat level and instead shows how seriously agencies viewed the terror risk.
The home secretary defended the government's counter-terrorism efforts so far. She pointed to the doubling of expenditure on counter-terrorism since September 11, a full consultative review ahead of a planned counter-terrorism bill, splitting of the Home Office to refocus on terrorism and the creation of a weekly security board to coordinate the efforts of key departments.
Counter-terrorism spending may have to increase further, she said, and Mr Davis announced the Conservatives would fully support such proposals.
Ms Smith rejected Mr Clegg's suggestion the government should consider how its own policies at home and abroad had made Britain a target for terrorism.
She said a grievance, real or imagined, could never justify murderous activity and extremists should instead be isolated.
Earlier Downing Street had denied that the attempted attack on Glasgow Airport should be seen as a comment on the new prime minister's background.
Mr Brown's official spokesman confirmed the government's measured response and said now "is not a time for rushing into new legalisation".
He said: "The prime minister is determined to ensure every action is taken to protect the public but he's equally determined not to be deflected from the main business of government."
Throughout the day ministers and police have reiterated calls for public vigilance and appealed for information. So far seven arrests have been made while another suspect remains in a critical condition in hospital.