A grim Tony Blair pledged that Britain will not be intimidated by the string of terrorist bombings which killed at least 33 people in London today.
He promised intense police and security service action to bring the bombers to justice and he repeated his "profound condolences" to the families of the victims.
In a televised statement recorded in Downing Street, Mr Blair said: "It is through terrorism that the people that have committed these terrible acts express their values and it is right at this moment that we demonstrate ours.
"I think we all know what they are trying to do. They are trying to use the slaughter of innocent people to cow us, to frighten us out of doing the things that we want to do, trying to stop us from going about our business as normal, as we are entitled to do and they should not and they must not succeed.
"When they try to intimidate us, we will not be intimidated. When they seek to change our country or our way of life by these methods, we will not be changed."
Mr Blair described the carnage in the capital as "a most terrible and tragic atrocity that has cost many innocent lives".
He said he had been briefed by the relevant ministers and Government officials and that announcements on the restoration of public services, in particular the London Underground, would be made as swiftly as possible.
He said: "There will of course now be the most intense police and security service action to make sure that we bring those responsible to justice.
"I would also pay tribute to the stoicism and resilience of the people of London who have responded in a way typical of them."
Mr Blair welcomed a statement from the Muslim Council of Great Britain condemning the terrorist acts.
He added: "We know that these people act in the name of Islam but we also know that the vast and overwhelming majority of Muslims here and abroad are decent and law-abiding people who abhor those who do this every bit as much as we do."
The Prime Minister said Britain would show "by our spirit and dignity" that "our values will long outlast theirs (terrorists)".
"The purpose of terrorism is just that. It is to terrorise people and we will not be terrorised.
"This is a very sad day for the British people but we will hold true to the British way of life."