They heard how it was technically possible for messages to be sent to all phones in a given area, with up-to-date details and guidance on the specific threat and how to escape it.
Nick Raynsford, the minister responsible for London's "resilience" against a terror attack, said the method was a 21st Century way of providing an "air raid siren".
Zyg Kowalczyk, director of the London Resilience Team, said: "We are looking at the possibility of swamping a particular area with a particular message. It is technically possible and we are working on it."
Mr Raynsford, chairman of the London Resilience Forum - set up to prepare the capital for a terror strike - said the city was better prepared for an al-Qaeda-style outrage than it was on 11 September 2001.
Co-ordinating with neighbouring counties to deal with chemical or biological material plumes spreading out from the capital.
"London is certainly significantly better prepared than it was 18 months ago to cope with a range of incidents, including catastrophic incidents on a scale far greater than we were previously equipped to respond," said Mr Raynsford.
"I can't give you a guarantee that London can cope in any situation - all I can say is we have made significant progress and we will go on doing so."
Radio and TV broadcasts
The government has decided against sending out leaflets to Londoners explaining what to do if terrorists strike, Mr Raysnford told the MPs.
The range of possible attacks, which could involve the use of biological, chemical or even nuclear weapons, was so big that any leaflet risked being "over complex and confusing or misleading".
Instead ordinary citizens will be kept informed by television and radio broadcasts, or from information distributed by emergency services and local authorities.
Modern telecommunications are an more effective 'air raid siren'
"There are a range of media in place that will ensure a much more effective method of communication than the era of the air raid siren," said Mr Raynsford.
During a visit to Ground Zero in New York, Home Secretary David Blunkett said the UK wanted to work hand in hand with the US to counter terror "wherever and whenever it occurs".
'When, not if'
The level of threat facing Britain was "unqualifiable", and he would consider introducing some of the security measures used in New York, in London.
David Veness, the Metropolitan Police Assistant Commissioner, stressed that it was a question of "when not if" the capital was attacked by terrorists.
"I regret that not only in the British context, but elsewhere, that is proving to be the reality of the challenge we face," he said.
"Nobody underestimates just how grave this is going to be in terms of the reality of responding to this form of crisis, but the scale of response is beginning to match it."
Meanwhile, every fire engine and London hospital was equipped with gas-tight protective suits for use in bio-chemical emergencies, said Mr Raynsford, and decontamination units and new suits were being provided.
The minister said he hoped firefighters would be ready to train on the new equipment.
A postponed major exercise testing procedures for evacuating a Tube train targeted by terrorists would be staged soon after the conclusion of the Gulf conflict.
Tory committee member Gerald Howarth pressed the case for a US-style minister for homeland defence to oversee all aspects of planning contingencies, such as a terror strike, but that was rejected by the minister.