Mohammad Sidique Khan and Shehzad Tanweer captured on film by MI5 surveillance operatives in 2004
The security service MI5 did not have the manpower to do extra checks on the 7 July ringleader before he carried out the attacks in 2005, a report has said.
But the Intelligence and Security Committee declined to criticise MI5, which it said had had other priorities.
It stressed that while officers knew of Mohammad Sidique Khan's terrorist links, there was no evidence to suggest he was a threat to national security.
But 7/7 survivors rejected the findings and demanded a public inquiry.
Rachel North, who was injured in the Russell Square blast, said survivors and victims' families were now considering seeking a judicial review to try to force the government to allow an independent investigation into what happened.
"This report does not come to any real conclusions at all," she told the BBC.
"Why was it that one man was investigated, but another, Sidique Khan, was not? Even though they were hanging around with the same people, raising money for the same extremist causes?
Dominic Casciani, Home affairs correspondent
This very detailed report clears MI5 of failing to anticipate the 7/7 attacks because it had so much on its plate in 2004.
Quite simply, Mohammad Siddique Khan was not listed as an essential target. Why? Because he had not been identified.
That's not to say the security service and police were completely ignorant. Police filmed him in 2001 when he went camping with known extremists. They didn't know his name. Later, MI5 had information about an "S Khan" - but did not pursue it because he was not classed as a threat.
For MI5, knowing what someone is up to is more important than exactly who they are.
They say they never knew what Khan was up to - and what he would turn out to be. It's this critical difference between the importance of who and what that the security service relies upon amid accusations that it failed to join the dots.
"Mohammad Sidique Khan was on the ladder in 2004 - are they telling us that someone is only of interest when they reach the top rung?"
Fifty-two people were killed in the suicide bombings in London in 2005.
The long-awaited report by a group of MPs describes in unprecedented detail what officers knew of Khan before the attacks.
It reveals that a police surveillance team filmed him in 2001 as part of an operation against suspected extremists.
However, he was not identified from the picture - and his significance was only realised after the bombings.
The report reveals that MI5 teams were stretched almost to breaking point in 2004 - the year before the attacks - attempting to trace terror suspects around the UK.
The committee said Khan and fellow 7/7 bomber Shehzad Tanweer were defined as "desirable" targets by MI5 after they were overheard discussing fraud and travel to Pakistan.
But resources were so stretched that officers could not even assess whether such "desirable" targets should be examined more closely unless they were known to be actively plotting an attack.
The committee's chairman, Kim Howells MP, said: "Hindsight is a wonderful thing. Those judgements were made at the time and, having gone in detail through all of the details, we cannot find any reason to criticise the actions that were taken at the time."
Mr Howells said his committee did have some criticisms of the police and MI5, in particular the fact that communication between the two appeared to have been done only on a "need to know" basis.
There should have been a "more complete dialogue", he said, but added that the situation had improved "immeasurably" since the 7 July attacks.
Gordon Brown said he agreed there was no evidence that warnings were ignored.
The prime minister said he accepted the committee's findings and felt that the decisions made by MI5 ahead of the bombings were "understandable and reasonable".
They want us to shut up and go away, but we are not going to
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