Residents revealed rumours had been rife that the area, with its large Bangladeshi community, would be a target following a blast in Brixton the previous weekend.

Far-right wing group Combat 18 has telephoned the police and claimed it was behind the latest incident, and police have confirmed they think the attack was racist.

Local resident Dunstan Gunasingha said there been anonymous telephone calls to local shops and traders after the Brixton explosion, saying "Brick Lane would be next".

He said: "Local people were expecting that something like this might happen. There were anonymous phone calls from Monday onwards to local shops saying there was going to be a bomb."

Target rumours

One local shopkeeper, who wished to be named only as Ali, said: "We knew it was going to be here. We have been saying that all week, but we never knew it was going to be that quick.

"There were rumours it would happen after Brixton - that Brick Lane would be next, then it would be East Ham, then it would be Southall."

Local MP Oona King, who represents Bethnall Green and Bow, said she believed the attacks were part of the backlash following the inquiry into the race murder of teenager Stephen Lawrence.

She added: "I think people failed to realise it in the black community but people are living every day in fear of racist violence.

Ms King, who lives about a mile away from Brick Lane, said that the problem now ranged from racial harassment to "its now most ugly form" - car bombs.

Intimidation

Julia Mainwaring, leader of Tower Hamlets Council, said the area had endured its share of racism in the past, but things had been relatively quiet recently.

"People are frightened - families were out doing their Saturday shopping and now the community feels intimidated," she said. "They want reassurance and want to feel that this type of thing couldn't happen.

"There are two issues here. One is the fear in the Bangladeshi community this evening - it will leave a scar on the local community.

"The other is the regeneration of the area and what effect this will have on the local business community and its knock-on effect."