Officers were carrying out a controlled explosion on a bomb in a taxi when it went off at 0030GMT - just yards from the front door of BBC Television Centre in west London.
Click here for events leading up to the blast
Deputy Assistant Commissioner Alan Fry, head of Scotland Yard's Anti-Terrorist Branch, said the bomb was linked to three incidents in London last year, including the missile attack on the MI6 building.
The blast may have been a reprisal for a BBC Panorama documentary which named four men it alleged had questions to answer over the Omagh bombing, Mr Fry said.
Downing Street has condemned the attack and pledged to hunt down those responsible.
There was a further security scare on Sunday as a controlled explosion had to be carried out close to London's Victoria station.
Travellers were evacuated from Victoria underground station and surrounding streets were sealed off shortly before 1300GMT when police were alerted to the incident.
Coded warnings
In the BBC explosion between 10 and 20 pounds of high explosive exploded in a red taxi (reg D902 GYH) abandoned outside Television Centre. The cab had been bought earlier in the day for £300.
One London Underground worker suffered deep cuts to his eye from flying glass and some damage was caused to the front of the building.
The warning was received by a London hospital and an unnamed charitable trust at about 2320GMT on Saturday.
It was the same codeword used when a device was planted on the railway line at Acton, west London, last year. The bomb was also linked to the explosion at Hammersmith bridge last June.
"It may be - and this is obviously speculation - it may be that frustrated in its efforts to pull off a spectacular in Northern Ireland, it has gone over to London to try there," the Ulster Unionist leader said.
Commissioner Fry described those responsible for the blast as "ruthless terrorists" prepared to use "ruthless attacks without any care for the consequences of their actions".
Security stepped up
Anti-terrorist branch officers are carrying out forensic tests in the Wood Lane area of Shepherd's Bush and the road is expected to remain sealed off to traffic on Sunday.
Richard Sambrook, director of BBC News, said security had been stepped up, and the need for further precautions was being reviewed.
He told the BBC's Breakfast With Frost programme: "The BBC is a very high profile organisation and that may well be the reason for it."
Terrorist attacks on the media were rare and so the bomb marked a significant change, he said.
"What we are all asking ourselves is whether this is simply a general change in tactics in some way, or whether there is something specific behind this particular attack and we simply don't know at the moment."
Underground services were severely disrupted on Sunday.
The Central and Metropolitan and City Underground lines were likely to be closed in the area, a police spokesman added.
Police said they were keeping an open mind about possible links between the blast and the explosion at a nearby Territorial Army barracks in February, which blinded a 14-year-old cadet.
Stephen Menary also had his left hand blown off by a bomb packed inside a torch at the TA centre in White City.
Police have appealed for anyone with information to call the Anti-Terrorist Hotline on 0800 789321.
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"I have no doubt that this blast is part of a campaign or series of attacks affecting the mainland and Northern Ireland," he added.
Staff had already been evacuated after police received a coded warning.
Northern Ireland First Minister David Trimble speculated that the Real IRA had targeted London because of recent failed attacks in Ebrington barracks in Londonderry and Claudy RUC station.
Bomb attacks in west London
21 February Territorial Army barracks, Shepherd's Bush. A 14-year-old cadet is blinded when a bomb explodes
20 Sept 2000 Dissident Irish republicans were the main suspects in the "rocket" attack on the MI6 spy headquarters in central London.
19 July 2000
The Real IRA was understood to have been responsible for a bomb near Ealing Broadway tube station
1 June 2000
A device found on Hammersmith Bridge. No one claimed responsibility
A BBC spokesman said broadcasting on channels had remained throughout the incident.
Related to this story:
Missile caused MI6 blast
(21 Sep 00 | Northern Ireland)
Bomb found on tube line
(19 Jul 00 | Northern Ireland)