Bomb disposal officers are still examining a rucksack on the top deck of a bus evacuated after an explosion.
A police officer at the scene told BBC News the driver had found the black rucksack split open on the top deck and they were treating it as suspicious.
There were no injuries. The bus was partially damaged. Police cordoned off streets within a 400-metre radius.
The blast, in Shoreditch, happened at about the same time as minor explosions at three Tube stations.
Bus company Stagecoach spokesman Steve Stewart said a Number 26 bus travelling from Waterloo to Hackney had just entered Hackney Road when the driver heard a bang from the top deck.
The bus driver is very shaken, but said to be fine. Among the emergency services at the cordon are firefighters from four engines in protective orange suits.
Quantity surveyor Mark Bond, 21, was standing next to the driver ready to get off the bus and go to his office across the road.
He told BBC News: "There was a bang and everyone dived off the bus. There was a lot of confusion because it wasn't an explosion just a big bang.
"It sounded like something was thrown at the bus or a car had hit it."
"The driver didn't say anything but opened the doors and walked round to the back of the bus to check the windows.
"Everyone got off sharpish - there was a bit of a panic."
Eight people had been downstairs and 10 upstairs, Mr Bond added.
"Everyone looked scared and frightened what with all the stuff going on in the area recently.
"I'm a bit shook up - you hear about things happening but you never think you will be caught up in it."
Shops in the immediate area were told to shut their doors but staff at some of them were allowed to remain inside.
Hackney Road shopkeeper Fazil Caglar told the BBC police had asked him to close "because there was a bomb inside the Number 26 bus." The trader himself said he had heard a "little bang".
Bank worker Paul Williamson, 19, who had been in a tattoo parlour 20 yards away, said: "The police were very quick, they came in and just [told] everyone to get out of the area because there was a possibility of an explosion.
"There were people running around in the street."
South-east London Housewife Candice Hinds, 25, also in the same tattoo parlour, said: "I spoke to a lady who was on the bus and she said it was a bomb, that there had been a bang and she could smell smoke and burning rubber."
Police have cordoned off the streets around the bus
Manish Suchde, 42, who works next to where the explosion happened, said: "We saw the bus stopped outside and everybody running off the bus.
"They were absolutely panicking, they were panicking and distressed."