The London [Images] police defused an explosive device placed in a vehicle parked in the Haymarket in Central London in the early hours of Friday and cordoned off the area.

The area is a tourist hotspot.

The "potentially viable explosive device" was being examined and the Metropolitan Police Counter Terrorism Command has launched an investigation and barricaded the Haymarket area, police said.

There was widespread disruption across the centre of London because of the security alert which came just ahead of the second anniversary of the July 7, 2005 attacks that killed 56 people, and just two days into Gordon Brown's premiership.

Police said they were called to the Haymarket, near the Piccadilly Circus landmark and the British capital's main theatre district, just before 0630 IST because of a car that raised suspicion.

"As a precautionary measure the immediate area was cordoned off while the vehicle was examined by explosives officers," they said in a statement.

"They discovered what appeared to be a potentially viable explosive device. This was made safe."

The alert, in a zone normally packed with tourists, theatre-goers and revelers, brought heavy traffic congestion and disruption on the London Underground.

Britain has been on the second highest level of security alert -- "severe" - since the British Islamist extremist bombers detonated homemade bombs on three Underground trains and a bus two years ago.