Emergency services said at least four of the casualties - including a one-year-old boy - were "seriously hurt" and are being kept in overnight.

The BBC's Peter Gould reports: Many families were in the area

Home Secretary Jack Straw condemned the incident as "an outrageous and mindless act".

"Our sympathies go out to those injured and their families and to the family of the injured police officer," he said.

Scotland Yard said there was no warning given before the blast at 1730 BST outside an Iceland supermarket.

Emergency services tend to the injured

Though no motive has been established police said the incident is not believed to be related to Northern Ireland paramilitary groups.

Reports of a second device outside a Mothercare store proved untrue, although the area was cleared as a precaution.

A police helicopter and explosives officers were called to the scene, which remains sealed off as forensic experts trawl the site for clues.

'Bomb in the bag'

A market trader moved the bag containing the device just seconds before it went off.

The area remains sealed off as forensic experts hunt for clues

Father-of-two George Jones said: "A holdall was handed to me by somebody who said someone had forgotten their shopping. I unzipped it and opened it wide and I could see what it was."

The 42-year-old said he saw a square device with Sellotape and nails and used his mobile phone to call the police.

He added: "I moved it to stop women and kids getting hurt. Then it went off. I was blown across the road and a couple of nails lodged in my leg and I was hit by concrete and glass which fell on me from the Iceland sign."

The BBC's Susan Bookbinder reports: No motive has yet been identified

Local resident Jools Thomas said: "A friend of mine who is a nurse tried to help patch up the worst. There was a bloke with a nail stuck in his head and another with a nail in his lung.

"I was walking back to my flat when I heard a big bang and a massive explosion. It was quite horrifying, because the whole floor shook.''

Pat Burke: "We heard a really loud bang"

Victims were taken to King's College Hospital, St Thomas's Hospital and St George's Hospital.

One of the 12 patients at St Thomas's, a 23-month-old boy, was undergoing a scan after a nail was embedded in his skull.

Commander Hugh Orde: About 48 people were injured

King's College Hospital spokesman Nick Samuels said five people had been admitted for treatment on Saturday night. He said four of them were in a "serious condition" and "some may be operated on tonight" for shrapnel-type injuries In total 17 people were taken to the hospital.

A van door was badly damaged in the blast

He said: "They range in age from 33 to 62 years. The injuries range from serious eye injury and a couple of serious head injury and one minor injury we are admitting overnight."

Brixton-based black rights campaigner Lee Jasper said he suspected the bomb may have been the work of a racially-motivated far-right group.

Brixton has a high concentration of ethnic minority residents and is known as a centre of black culture in London.

Mr Jasper said: "What we could potentially be witnessing is a backlash against the huge amount of coverage given to the Stephen Lawrence case."

Concert cancelled

Afterwards trolleys and baskets could be seen scattered along aisles of the Iceland store. But outside the site of the explosion remained largely intact.

Shop windows, market stalls and a bus shelter showed no major signs of damage - the only visible evidence of the drama was a white Transit van with one of its rear doors partly blown off.

A spokeswoman for London Transport said Brixton Underground station had been closed and bus services were diverted as the area was cordoned off.

A concert by dance act Fatboy Slim was cancelled by police. It was due to take place in Brixton Academy, with 4,000 people attending.