Home secretary Theresa May said: "The increase in the threat level is related to developments in Syria and Iraq where terrorist groups are planning attacks against the West. Some of these plots are likely to involve foreign fighters who have travelled there from the UK and Europe to take part in those conflicts."
She added: "We have already taken steps to amend our powers and increase our capabilities for dealing with the developing terrorist threats we face... We face a real and serious threat in the UK from international terrorism."
In Downing Street, Prime Minister David Cameron told newspersons that Islamic State (IS) extremists represented a "greater and deeper threat to our security than we have known before".
He said that "learning lessons from the past doesn't mean there isn't a place for our military" in combating the threat, but did not commit to any military action. He added the "threat is growing" from Britons travelling to fight with IS, saying at least 500 people had travelled from the UK "to fight in Syria and potentially Iraq".