Defiant Londoners returned to the Tube and the buses today determined to carry on with their lives the day after terrorists brought carnage to the capital.

Although there were fewer commuters than usual, hundreds of thousands of people made their daily journeys into a city which still bore the scars of yesterday's co-ordinated terror attacks.

As the capital prepared to mark the 60th anniversary of the end of World War II this weekend, there was the same resolve that life would go on whatever the terrorists had hoped to achieve.

A huge manhunt was under way to find the bombers, who killed more than 40 people during 56 minutes of hell which terrorised the capital.

Home Secretary Charles Clarke said all efforts were being concentrated on catching the bombers to stop them striking again.

"The number one purpose today is to identify the perpetrators and arrest them because there is obviously a danger if there is a group that has committed these attacks not brought to justice and therefore able to continue thinking about carrying out further attacks.

"That is, of course, the number one preoccupation the police and security services have at this moment," he said.

He said the Government was taking seriously a claim on a website from an al Qaida group that it was responsible.

The Home Secretary defended the decision to lower the level of security threat in the capital before the attacks, saying that all the security services thought the risk had got "slightly lower".

"Obviously it was wrong. We have looked very carefully at the threat we are now under, particularly in the light of events yesterday, and the threat level will be increased."

He agreed that the authorities had "absolutely no idea" yesterday's attacks were being planned.

But he denied claims that London's security had been compromised because of Metropolitan Police officers being deployed to the G8 summit in Scotland.

Tony Blair, who has vowed that the culprits would be brought to justice, was expected to return to London later today after the final session of the G8 summit in Gleneagles.

Anti-terrorist detectives are investigating the possibility that Britain was subjected to its first suicide bombing after the series of co-ordinated no warning strikes in the centre of the city.

A passenger on the double decker bus ripped apart in one of the four blasts said he saw an "extremely agitated" man rummaging in a bag just seconds before the explosion.

Scotland Yard put the confirmed death toll at 37 but that looked set to rise with 95 seriously injured among the 300 casualties taken to hospital.

Police sources said more than 40 people had died and Australian Prime Minister John Howard told reporters in Canberra that the death toll was 52.

The largest atrocity in peacetime London began at 8.51am yesterday when seven people died following the first blast in a Tube tunnel 100 yards from Liverpool Street Station.

At 8.56am, a blast in a tunnel between King's Cross and Russell Square left 21 people dead.

At 9.17am, seven people died after an explosion ripped through a tunnel wall at Edgware Road station, damaging three trains.

At 9.47am a blast tore the roof off of a red number 30 double decker bus packed with commuters forced above ground after the Tube network had been shut down.

Scotland Yard said two people were confirmed dead in the bus blast but eyewitnesses spoke of seeing more bodies.