"It is obvious that if the device had detonated there could have been significant injury or loss of lives," Peter Clark, the head of London's anti-terrorist police, said in a press conference, the Associated Press reported.
Ambulance workers treating an unrelated medical situation nearby alerted police to smoke coming from inside a parked Mercedes. The car was parked outside the Tiger Tiger nightclub on Haymarket Street near Piccadilly Circus, which was still crowded when police arrived shortly after 1 a.m.
Explosives experts used remote-controlled equipment to test the bomb before manually defusing the device.
Clark said an investigation is currently underway to catch the culprit. Although he said it was too early to name suspects, he acknowledged the similarities to a 2004 plot where al-Qaeda terrorists were caught planning gas-filled car bomb attacks, the AP reported.
The AP later quoted two American officials as saying the initial investigation had not linked the attempted attack to any terrorist organization and that British authorities had no suspects and no definitive description of anyone leaving the vehicle.
The incident also occurred just a day after Gordon Brown assumed the role of Great Britain's new prime minister. In a statement this morning, he called for the British people to exercise caution.
"The first duty of a government is the security of the people and as the police and security services have said on so many occasions, we face a serious and continued security threat to our country," Brown said, the AP reported.
Brown's cabinet faced its first challenge as new Home Secretary Jacqui Smith presided over a meeting of Britain's emergency response committee.
"We are currently facing the most serious and sustained threat to our security from international terrorism," Smith told The Times of London, echoing Brown's call for vigilance.
In a second press conference later Friday, Clark told reporters the other car had originally been parked in the same area as the first vehicle, but had been towed to the area near Hyde Park. He added that the police were convinced the two explosive-laden automobiles were linked and that together the bombs could have killed scores, if not hundreds, of people.
"The vehicle was found to contain very similar materials to those that had been found in the first car," he said. "There was a considerable amount of fuel and gas canisters. As in the first vehicle, there was also a quantity of nails. This like the first device was potentially viable."
Friday's thwarted bombings come just days ahead of the second anniversary of a deadly wave of city-wide bombings on London's commuter system nearly two years ago that killed 52 people.
U.S. Secretary of Homeland Security Michael Chertoff said officials were monitoring the situation, but did not believe the U.S. was at risk for a terrorist attack.
"At this point, I have seen no specific, credible information suggesting that this incident is connected to a threat to the homeland," Chertoff said in a written statement, but added Americans should report any suspicious activities to the police. Chertoff also said his department has no plans to elevate the current threat level.