Armed police patrol Heathrow airport
Foreign Secretary Jack Straw warned that British people could now expect to see security such as that seen in Northern Ireland being implemented across the whole country.
All government buildings, military bases and financial institutions have been placed on red alert and British people abroad have been advised to take extra precautions over their personal safety.
Private flights cancelled
Members of the government's newly-named Civil Contingencies Committee (formerly Cobra) were meeting at Downing Street on Wednesday morning to assess the 'security profile' of all UK armed forces, diplomatic and intelligence personnel abroad, and the safety of UK nationals travelling abroad.
Prime Minister Tony Blair said on Tuesday that security at airports had been implemented to the highest levels and no flights, for which the highest standards of security could not be applied, would take off from the UK.
Private flights have been stopped except where specifically authorised.
Flight paths into London have been changed so there will be no civil flights over central London.
The prime minister also said security had been increased at all government buildings and military premises and the police across the whole of the UK have been placed on full alert.
He also said advice had been given to major financial and business institutions about appropriate security measures.
BA cancel Israel flights
A spokesperson for the British Airports Authority (BAA) said: "As soon as we became aware of the situation we put our airports on full alert and liaised with the Department Transport, Local government and the Regions (DTLR) about further security measures, which have been put in place.
"BAA airports are open but US airspace continues to be closed today.
"There are no flights to the US or Canada.
"British Airways has informed us they have cancelled flights to Israel.
"Passengers should expect some delays to other destinations due to increased security measures and the changes in air traffic control procedures."
A spokesperson for the London Stock Exchange said the situation there was being monitored and kept under review.