Police are hunting for a chemical device after anti-terror officers carried out an armed raid that led to two arrests and a man being shot.
The 23-year-old suspect shot during the terrorism operation in Forest Gate, east London, is recovering in hospital under armed guard.
His brother, 20, is being held at Paddington Green police station.
Police have been given warrants extending the time they can hold the two men until 7 June.
Security sources told the BBC they had had intelligence there was a "viable" chemical device in the house.
Intelligence had suggested it was a potentially fatal device that could produce casualty figures in double or even triple figures.
According to BBC home affairs correspondent Margaret Gilmore they do not believe it would be a sophisticated bomb, but a homemade device.
POLICE SHOOTING GUIDELINES
Police officers can shoot "to stop an imminent threat to life"
A firearms officer should identify themselves and give an oral warning of intent to shoot
Officers should not fire warning shots except in "most serious and exceptional" circumstances
Shots should be aimed at the central body mass
The Operation Kratos [shoot-to-kill] policy allows officers to shoot at the head without warning if they believe the suspect may detonate a bomb
Kratos does not require police to see a "suicide jacket" before opening fire
Police were now looking in "every nook and cranny", said BBC home affairs correspondent Daniel Sandford, but there was no obvious and immediate threat, he said.
The BBC has learned that the suspects are Abdul Kahar, who was shot, and Abdul Koyar, who are both of Bangladeshi origin.
Police have searched a locker at Tesco in Tottenham High Street, where one of the brothers worked, and another locker at a Royal Mail premises in Whitechapel, where the other worked.
A single shot was fired during Friday's raid, according to the Independent Police Complaints Commission, which will continue to investigate over the weekend.
One line of inquiry is that there was a struggle with police and a gun went off accidentally, said BBC home affairs correspondent Danny Shaw.
Julian Young, the solicitor representing Abdul Koyar, told Sky News: "He's obviously not happy at being in custody but I'm looking after him to the best of my ability."
Air exclusion zone
The go-ahead for the raid came after discussions between MI5, the anti-terrorist branch, and bio-chemical experts from the Health Protection Agency which advises on the potential health risks.
An air exclusion zone was imposed around the scene, banning aircraft from flying below 2,500ft above the site.
But local residents were not evacuated, either because the threat of explosions was not deemed serious enough or police did not want to alert the suspects.
Some officers wore bio-chemical suits and carried gas masks in the search of the terraced house in Lansdown Road.
Deputy Assistant Commissioner Peter Clarke, head of the Met's anti-terror branch, said Friday's operation was planned in response to "specific intelligence".
But the operation has angered some locals, prompting a leaflet to be circulated announcing a meeting next week to discuss the raid.
The leaflet, which was produced by Newham Respect Party, said the community was "shocked" by claims of a terrorist plot.
It states: "Since the events of 9/11 there has been a growing identification of Muslims with terrorism."
It adds: "We cannot comment on this individual case but we know many such raids have been against innocent people."
Mr Kahar was arrested on suspicion of the commission, preparation and instigation of acts of terrorism as he was being treated at the Royal London hospital.
One eyewitness said officers smashed a window to gain access
Officers from MI5 are thought to have been watching a group of British young people of Bangladeshi origin for weeks.
Their e-mails, phone calls and movements were logged and the suspicion was they were planning a terrorist attack in the UK.
The IPCC said it would use its own investigators to "examine the circumstances surrounding the discharge of a police firearm".
Meanwhile, a family from an adjoining house caught up in the raid said in a statement they were "in no way involved in any terrorist activity".
They also claimed they were physically assaulted and were consulting lawyers over possible action.
But police strongly denied that anyone was detained without arrest for 12 hours. The Met said those removed from the property spent the night in a hotel.
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