Armed police have flooded London's streets as the terror threat level was raised to critical amid fears the Parsons Green bomber could strike again, Theresa May announced tonight.
The introduction of Operation Temperer will see soldiers replacing police at key sites including nuclear power plants to free up extra armed officers for regular patrols.
Scotland Yard said it is making 'excellent' progress in hunting the suspected terrorist who set off a crude bucket bomb on a packed commuter train by Parsons Green tube station in west London at 8.20am.
Mrs May said in a statement from Number 10: 'The Joint Terrorism Analysis Centre has now decided to raise the national threat level from severe to critical - this means their assessment is that a further attack may be imminent.'
Minutes later Assistant Commissioner Mark Rowley suggested there might have been more than one person involved, stating that police were 'chasing down suspects'.
Police identified the suspected terrorist using CCTV footage but the investigation has been overshadowed by an extraordinary diplomatic row triggered by Donald Trump
The US President tweeted just hours after the rush hour blast that police had the attacker 'in their sights' and should have been 'more proactive' in catching 'the loser'.
Scotland Yard hit back and said Mr Trump's comments were 'pure speculation' while senior officers refused to name the suspect.
The President later rowed back on his controversial comments by posting another tweet saying, ‘our hearts and prayers go out to the people of London’.
The Islamic State group claimed responsibility for the attack tonight, saying its 'soldiers' had 'planted IEDs'.
As Britain faced its fifth terror attack in a year it has emerged:
- Bucket bomb left on Tube train - which had a timer - failed to explode properly at 8.20am but left 29 injured;
- Most victims suffered 'flash burns' and others crush injuries in 'human stampede' as people fled the train;
- Two hours after the explosion Metropolitan Police confirmed they were treating it as a terrorist incident;
- The IED used Christmas lights as a fuse, as recommended by ISIS magazines and online bomb manuals;
- Police are looking for multiple suspects - and officers have told MailOnline that main suspect is armed;
- Donald Trump insists he has been briefed on bombing and Scotland Yard knew of the suspect before attack;
- The Metropolitan Police hit back at 'pure speculation' and refused to name the suspect they are looking for;
- Met spotters are watching back CCTV from the train and at Tube stations to trace the bomber's steps;
- ISIS claimed responsibility for the attack through its Amaq news agency saying 'soldiers' had 'planted IEDs'
- Police asks the public to dial 999 or the anti-terror hotline on 0800 789 321 if they see anything suspicious.
It was the middle of rush hour when the crude bucket bomb - which had a timer - went off at 8.20am inside a tube train packed with commuters, including children and a pregnant woman.
The device was hidden in a builder's bucket and could have killed dozens but failed to properly detonate and sent a 'wall of fire' through the carriage at Parsons Green, injuring at least 29 people.
Terrified passengers were left covered in blood with scorched hands, legs, faces and hair – others suffered crush injuries during a stampede as they 'ran for their lives' over fears the 'train would blow up'.
London Ambulance took 19 patients to hospitals, while the others went in themselves. The four hospitals dealing with patients were Imperial, Chelsea and Westminster, Guy's and St Thomas' and St George's.
Officers are tonight hunting for the bomber across London amid claims he could be armed and might have planted other explosive devices.
An officer at the scene told MailOnline: 'We believe there is a second bomb - there is a man with knives on the loose.'
In a pre-recorded television statement released around 8.30pm, May said military personnel would replace police officers 'on guard duties at certain protected sites which are not accessible to the public'.
She said: 'The public will see more armed police on the transport network and on our streets, providing extra protection.
'This is a proportionate and sensible step which will provide extra reassurance and protection while the investigation progresses.'
Speaking moments afterwards, Assistant Commissioner Mike Rowley said: 'We are making excellent progress at the moment as we pursue our lines of inquiry to identify, locate and arrest those responsible.
'We have hundreds of police officers trawling through CCTV footage, detectives have spoken to tens of witnesses and we have taken a large number of calls to the hotline... from members of the public.
'Indeed members of the public have sent in so far 77 images and videos of the scene which they have sent in to our appeal website and these are now being assessed for evidential value.'
Mr Rowley said he was only aware of one device, and the remnants of that device are being examined by experts.
London Mayor Sadiq Khan told LBC radio 'there is a manhunt under way as we speak' and there have been no arrests. Mr Khan was later criticisd for using a TV interview to score political points about police cuts.
He said the events backed up his argument that the Metropolitan Police needed more money. But Tory MP Andrew Bridgen said: 'I would've thought Sadiq Khan would want to keep politics out of the terror attack'.
ISIS claimed responsibility for the attack this evening through its Amaq News Agency, saying its 'soldiers planted IEDs'. However, the group has often made false claims in the past.
Photographs show what experts believe is an 'unsophisticated' bomb in a flaming white bucket inside a Lidl freezer bag with Christmas lights protruding from the top - a type of fuse encouraged by ISIS in its online manuals.