The 10 men were detained in co-ordinated dawn raids in London, Derby and Wolverhampton yesterday. They are believed to have been part of a terrorist cell led by Abu Musab al-Zarqawi, the notorious chief of Al-Qaeda in Iraq.

As well as planning bomb attacks in this country, the suspects may have been preparing to send Islamic extremists from Britain to fight the coalition forces in Iraq, security officials said.

Three men were arrested in Croydon, south London, four in Wolverhampton and three in Derby, following what officials describe as a "significant" and long-running investigation by the Yard and MI5.

"There is intelligence to suggest that they were planning some sort of attack in the UK," a senior counterterrorism official said. "Things have changed since July 7. There was no way with the intelligence we had that we could let these people carry on doing the sort of thing we think they were planning to do."

The sources said it was too early to say which targets the suspects may have been planning to attack or when they planned to carry out the attacks. Police sources said the operation was not directly connected to the investigation into the July 7 attacks in which 56 people, including the four suicide bombers, died.

The plot is thought to have involved the use of conventional explosives, probably to be loaded into cars and driven into crowded city centres. Officials said that it was unclear whether any of the men had been planning suicide attacks. They emphasised that no explosives had been recovered in the searches, which will continue today.

Investigators are now examining possible links between the suspects and al-Zarqawi, a 37-year-old Jordanian radical who is accused by America and Britain of organising a string of spectacular suicide bombings in Iraq. He is believed to have been personally involved in the beheading of western hostages.

Al-Zarqawi’s network is considered to be the main source of kidnappings, bomb attacks and assassination attempts in Iraq. He is believed to want to extend his operations into western Europe.

America has put a $25m bounty on his head — the same sum that it is offering for the capture of Osama Bin Laden. The reward was increased after US authorities intercepted a letter which, they claimed, confirmed that he was working with Al-Qaeda to drive American forces out of Iraq.

A British official said the latest arrests involved men who might have links to the Iraq-based terrorist chief. "They may have been preparing to help jihadists [holy warriors] go to Iraq," he added.

MI5 believes that as many as 70 young Muslim men have travelled from Britain in the past two years to join the insurgency against the coalition forces in Iraq.

In June police in Manchester raided a house in Moss Side which belonged to a man who was killed in Iraq after an attack on coalition forces earlier this year. Detectives said that they were investigating a suspected support network helping British-based Islamic militants to travel to Iraq.

The Metropolitan police declined last night to disclose further details of the arrests. A spokesman said: "The anti- terrorist branch arrested 10 men in connection with an investigation into suspected international terrorism in the UK.

"Police executed warrants at three residential addresses, making a total of 10 arrests, all on suspicion of the commission, preparation or instigation of acts of terrorism under the Terrorism Act 2000."

He said that the 10 men had been taken to police stations in the West Midlands, Derbyshire and central London where they were being interviewed by police. Under existing laws, terrorist suspects can be held for up to 14 days before they must be charged or released.

Charles Clarke, the home secretary, indicated last week that he would go ahead with proposals to extend the time limit for detention without charge to three months to give police more time to question suspects.

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