London on the edge

A massive manhunt was under way last night for a terrorist cell after an attempt to explode a car bomb outside a packed London nightclub was thwarted by chance. Counter-terrorism detectives were scouring hundreds of hours of CCTV footage to track the driver of a 10-year-old Mercedes abandoned in the West End early yesterday, which contained a device capable of killing and maiming hundreds.

Last night police confirmed that a second device had been found in a car which had been towed to an underground car pound on Park Lane. Whitehall sources said that the gas and fuel bombs were to have been set off using mobile phones attached to detonators.

The first known attempts to bring Islamist tactics used in Iraq to Britain, by exploding a vehicle bomb to cause maximum casualties, cast a pall over Gordon Brown's second day as Prime Minister. Mr Brown said the attacks showed that the UK faces a "serious and continuous threat" from terrorism.

Scotland Yard said that if the car parked outside the Tiger Tiger nightclub in Haymarket, where 800 people were partying, had exploded it would have caused carnage. The bomb - made with propane gas bottles used in patio heaters, 60 litres of petrol and large quantities of nails - was spotted shortly after 1am by an ambulancecrew attending an unconnected incident. It was defused by a police explosives expert who disconnected the mobile phone trigger.

Two mobile phones, one to serve as a back-up, were found in the saloon car in a chilling reminder of the Madrid train bombings in 2004, which claimed 191 lives using bombs triggered by mobile phones.

Deputy Assistant Commissioner Peter Clarke, the head of the Yard's counter-terrorism command, said: "It is obvious that if the device had detonated there could have been significant injury or loss of life."

Police confirmed last night that the second car, a blue Mercedes 280, also contained a large amount of petrol and nails. Mr Clarke said it had been issued with a parking ticket on Cockspur Street at 2.30am on Friday, near the Thai Square nightclub. It was towed to the compound on Park Lane an hour later. He said: "The vehicles are clearly linked. The discovery of what appears to be a second bomb is obviously troubling and reinforces the need for the public to be alert."

Haymarket and a large chunk of the West End remained closed off last night as police continued to scour the area. The operation, including the searches of the second Mercedes and another suspicious vehicle in Fleet Street brought traffic to a standstill in parts of London.

Mr Clarke insisted officers were keeping an open mind about whether Tiger Tiger was the intended target of the attack and who was behind it. But Islamists with links to al-Qa'ida in Pakistan or Iraq are the prime suspects amid concern that further attacks may be planned. A Whitehall source said: "This bombing appears to have been stopped almost by accident but we must be vigilant for further incidents."

Mr Brown was woken on his second morning as Prime Minister with news of the failed attack and its aftermath overshadowed the unveiling of the junior ranks of his administration and a planned discussion in Cabinet on constitutional reform.

Jacqui Smith, the new Home Secretary, who was told of the incident in the early hours, said: "We are facing the most serious and sustained threat to our security from international terrorism. This latest incident reinforces the need for the public to remain vigilant and alert to the threat that we face at all times."

If it is confirmed that Islamist terrorists are behind the attack, it will be the first time that an apparently viable car bomb has been deployed in the UK by Muslim fundamentalists. The attack has parallels with two other known terrorist plots in Britain, including one to explode limousines packed with gas cylinders in underground car parks.

Last month, police confirmed they were carrying out checks on large vehicles including petrol and chemical tankers. Sir Ian Blair, the Commissioner of the Metropolitan Police, said earlier this year: "Vehicle-borne weaponry is the greatest danger that we can face."

Security sources said further attacks were a "possibility" as searches were conducted across London. It is understood that a description of the driver obtained from the hundreds of CCTV cameras in central London was being circulated.

Senior officers confirmed that the failure of Thursday night's assaults were largely a matter of good fortune. An ambulance crew had been called at 1.25am to the Tiger Tiger, a nightclub with bars and restaurants over four floors, to treat a man with a minor head wound. One member of the crew spotted what he thought was smoke inside the light green Mercedes, which was parked outside the entrance to the club with its headlights left on.

It is thought that the "smoke" was in fact vapour from the petrol in plastic containers stored on the back seat and in the boot of the Mercedes. The car also contained an unspecified number of readily available gas cylinders, including at least one 18kg "patio gas" propane cylinder. Large quantities of nails, nuts and bolts also surrounded the charge.

The area was rapidly evacuated before a police explosives team moved in using a remote control robot. Mr Clarke described as "heroic" the actions of the member of the team who defused the device.