John Prescott said threats confirmed Bin Laden's guilt
A videotaped statement shown on Arabic television threatened retaliation, and warned Muslims in Britain and the US to stay away from aeroplanes and high buildings.
Deputy prime minister John Prescott said the statement was part of a propaganda war being waged by the terrorists
Downing Street said the threats could "leave no one in any doubt of the organisation's intentions to continue, conduct and incite acts of terrorism".
Mr Prescott, speaking from Moscow, said Osama Bin Laden had "made it clear that he wants to continue these actions".
Mr Prescott told the BBC's Breakfast With Frost programme: "It was only a couple of weeks ago that he was denying he had anything to do with such atrocious actions - but now he is threatening us all with that."
The White House has dismissed the statement as "just more propaganda".
'Infidels out'
In the video statement - apparently recorded on Thursday - Al-Qaeda spokesman Abu Ghaith said: "Al-Qaeda organisation orders the Americans and the infidels in the Arabian Peninsula, particularly the Americans and the British, to leave the Arabian Peninsula.
"If the mothers of these need their sons, then they should ask them to leave the Arabian peninsula, because the land will be set on fire under their feet, God willing."
Abu Ghaith also issued specific threats against Prime Minister Tony Blair.
He said: "The storms will not calm, especially the aircraft storm.
"These storms will not calm until you retreat in defeat in Afghanistan, stop your assistance to the Jews in Palestine, end the siege imposed on the Iraqi people, leave the Arabian peninsula, and stop your support for the Hindus against the Muslims in Kashmir.
"We also say and advise the Muslims in the United States and Britain, the children, and those who reject the unjust US policy not to travel by plane.
"We also advise them not to live in high-rise buildings and towers."
Broadcasting executives have been invited to Downing Street to discuss official concern that the videos may contain coded messages to terrorists in the UK.
The director of BBC news Richard Sambrook said only a fraction of the footage has been shown and the footage had been dubbed in English - a process over which he said Bin Laden would have had no control.
Tackle poverty
Mr Prescott, who is visiting Moscow as part of the ongoing effort to maintain an international coalition against terrorism, also said the coalition should be used to tackle poverty.
He told Breakfast With Frost that it was important for the allies to work for a settled international situation after the immediate conflict.
"We equally want to win the peace as well as the war," Mr Prescott said.
Calling on the coalition to address the areas of resentment where terrorism grew, he said it was "time to encourage that cooperation for good and peaceful goals as well as the hunt for terrorism".
"If we could use this kind of commitment, this passion, for a global alliance to deal with terrorism - let us turn that energy and effort to deal with poverty," Mr Prescott added.