The threat of terror has returned to London after a car bomb was found in the heart of the capital.

Bomb squad officers defused the "potentially viable" device after police investigated reports of a suspicious vehicle in the early hours.

One police source said the bomb posed a real and substantial threat to the surrounding area, just yards from Piccadilly Circus.

A police source said: "The indications that we have got so far are that it was certainly a big device."

A witness reported seeing gas canisters being removed from the car, believed to be a silver Mercedes.

A massive police cordon was thrown around The Haymarket in the heart of the capital's busy West End.

Dozens of forensic officers are poring over the crime scene, which was covered by a blue plastic police tent.

Scotland Yard said detectives from Counter Terrorism Command were investigating the potential bomb plot.

One eyewitness told Sky News that door staff at the nightclub Tiger, Tiger alerted police after the car was driven into bins on Thursday night and the driver ran off. The witness said the large silver saloon car was being driven "erratically" before the minor crash.

Rush-hour commuters faced disruption as nearby Piccadilly Underground station was closed.

The Haymarket is in the heart of London's theatreland and close to the popular shopping area of Regent Street.