A terrorist plot has been uncovered to "commit mass murder on an unimaginable scale" by exploding up to 12 aircraft in mid-flight between Britain and America using liquid explosive, it was announced today by officials in London and Washington.

So far 21 suspects - believed to be British citizens, many of Pakistani origin - have been arrested under the Terrorism Act 2000 in overnight raids in London, the Thames Valley and Birmingham.

Detectives are currently searching a number of business and home addresses. Buildings in Walthamstow, East London, and in High Wycombe, were among those cordoned off by police tape and guarded by uniformed officers. A police spokesman said that several items of interest had been found.

John Reid, the Home Secretary, said that the terror threat to the public was unprecedented, the biggest that Britain had ever faced. Police said that the plot had a global dimension, and that the security services were co-operating with foreign security agencies.

Mr Reid said that the huge, complex operation was at an early stage and that although it was believed that the main suspects had been rounded up, police have not ruled out further arrests.

Both Britain and America have raised their terrorism security alert to the highest level.

Michael Chertoff, the US Secretary of Homeland Security, said that the plot bore the hallmarks of al-Qaeda, resembling the infamous Bojinka plot hatched by the 9/11 mastermind Khalid Sheikh Mohammed, to bring down 11 airliners over the Pacific in 1995.

He played down a suggestions that the plot might have been timed for the anniversary of 9/11, however, saying: "Our general experience is that terrorists are not necessarily motivated by anniversaries the way that people project. I think they were really getting quite close to the execution phase."

Meanwhile scenes of chaos were unfolding at British airports, as draconian security measures were put in place from the early hours to prevent explosives being carried on board in hand luggage.

Among the extra security measures announced by the Department of Transport was a ban on carrying any liquids on board. America imposed a similar ban, and Alberto Gonzales, the US Attorney General, said that this was because the plotters had apparently planned a liquid chemical bomb.

 
Queues of holiday and business passengers snaked outside airport terminals, as many flights were cancelled and Heathrow announced that it was closed to all incoming and outgoing short-haul flights until at least 3pm. Stansted and Gatwick were also very congested, with full passenger halls and planes backed up on the runway.

The British Aviation Authority warned passengers not to go to the airport unless absolutely necessary. British Airways cancelled all short haul flights for the rest of the day and easyJet said that no flights would operate out of Luton, Stansted and Gatwick today. The disruption is expected to last several days.

Mr Reid said that the scale of the terror plot was potentially bigger than the September 11 attacks. "Had this plot been carried out, the loss of life to innocent civilians would have been on an unprecedented scale," he said.

"The decision to take action was an operational matter, but was taken with the full knowledge of the Prime Minister, the Deputy Prime Minister and the Secretary of State for Transport, as well as myself. The Prime Minister has been briefing the President of the United States on the operation, and the Transport Secretary and I have been in close contact with the US Homeland Security Secretary and the US Transport Secretary.

"While the police are confident that the main players have been accounted for, neither they not the Government are in any way complacent."

The leaders of both UK Opposition parties had also been kept informed and also fully behind the Government and the security services, Mr Reid added. He said that he had chaired two meetings of Cobra, the Cabinet's emergency liaison committee with the police and the security services, which had lasted much of the night.

Deputy Commissioner Paul Stephenson of the Metropolitan Police said in a briefing today: "We are confident that we have disrupted a plan by terrorists to cause untold death and destruction and, quite frankly, to commit mass murder.

"We believe that the terrorists' aim was to smuggle explosives onto aeroplanes in hand luggage and to detonate these in mid-flight. We believe the target was flights between the United Kingdom and the United States of America.

"There are 21 people who remain in custody, but the operation is ongoing. We believe we have been very successful in arresting suspects, but this is a very early stage of a very extensive and complex operation. It is a very, very serious plot... Put simply, this was a plot to commit mass murder on an unimaginable scale."

Senior police sources told The Times that they believed up to 12 flights to the US were going to be attacked simultaneously, probably later this summer. The suspects in custody are believed all to be British citizens, many of them of Pakistani origin.

The secret investigation into the plot has already lasted a year. Deputy Assistant Commissioner Peter Clarke, the Met's head of anti-terrorism, said that intensive surveillance had been carried out of the meetings, movements, travel, spending and the aspirations of a large group of people, both in Britain and abroad.

"Last night the investigation reached a critical point when the decision was taken to take urgent action to disrupt what we believed was being planned," said Mr Clarke.

Meanwhile police chiefs and John Prescott, the Deputy Prime Minister, have spoken to community leaders to keep them in touch with the investigation. Mindful of the outrage amongst the Muslim community when Met anti-terror officers raided a house in Forest Gate last month, Mr Stephenson was careful to stress that Muslims were not being targeted by the police.

"This is not about communities: it is about criminals, murderers, people who want to commit mass murder. This is about people who might masquerade in the community, hiding behind certain faiths, but who want to commit acts that no right-minder person would want to applaud," he said.

Airports banned all hand baggage on board planes except essential travel documents and small wallets, carried in clear plastic bags. Liquids were banned, except for baby formula and prescription medicines, and travellers were being told to be prepared to show that these were harmless by tasting them at the security gate.

All passengers were being body-searched, their shoes X-rayed and their pushchairs, walking sticks and belongings were being screened. Only airport wheelchairs were being allowed past security. Passengers for the US were being searched again at their boarding gate.

As the number of cancelled flights began to mount, passengers who had already checked in their suitcases containing all their personal belongings - including their car keys and phones - were facing hours more delays in retrieving their bags so that they could make their way home. Others, in transit from other countries, were hunting for hotels with onward travel very unlikely today.

British Airways said any of its passengers who failed to comply with the Government?s restrictions on luggage and other items would not be allowed on its planes.

David Hill, a former Deputy Chief Constable and police liaison officer on Cobra, warned that it was likely that the draconian security measures would remain in place for weeks, to deter any conspirators involved in sub-plots to the main terrorist plot.

"It is the height of the holiday season, and I think that is deliberate," said Mr Hill, who is now a security consultant with the red24 personal security firm. "Terrorists are committed, dedicated killers with not an ounce of compassion for anyone, man, woman or child.

"Plastic explosive can be moulded to look like a chocolate bar, and
set off inside a confined, pressurised cabin that quantity would be enough to decimate a plane, wreck it, virtually obliterate it. Two inert liquids can be mixed to create an explosive chemical capable of causing a fire that, aboard a plane at 20,000ft, would leave passengers with very little chance of survival.

"If we are to deter suicide terrorists who are continuing to plot while we speak, I think these security measures will be with us not for just hours or days, but for quite some time."