The Parsons Green bomb could have caused huge devastation if the main explosive component had ignited as intended.
Experts said the bomb, which was apparently reliant on a string of fairy lights attached to a battery, appeared to have malfunctioned several stations before it was due to explode.
The crude device, packed into a builder's white bucket and carried in a Lidl cool bag, exploded on a packed London Underground train shortly before 8.30am. injuring at least 22 people, including a boy believed to be aged about 10.
It appears that while the initiator element of the bomb exploded, it failed to ignite the main part of the bomb that was likely packed with ball bearings, screws or nails to maximize damage and casualties.
The UK terror threat has been increased to the highest level following the attack, the prime minister has said.
Theresa May said the threat had been upgraded from severe to critical - meaning an attack is expected imminently.
May said soldiers will be deployed across London to guard against another attack.
It is believed the bomber, who remains on the run, boarded the tube with the bomb with the intention of activating a timer at a specific station. However, it seems to have detonated prematurely, possibly due to friction, and the suspect is thought to have escaped the train in the midst of the panic.
Hundreds of British police have embarked on a massive manhunt, racing to find out who placed the bomb on the train.
Officers compared the device to those used in the failed 21/7 bombings, in which jihadis attempted to blow up tube trains. In that case, the bombs' detonators went off but the explosives themselves were not ignited.
Prof Hans Michels, professor of safety engineering at Imperial College London, said: "There are a lot of similarities with the aftermath of the second largely failed explosions on the London underground in 2005.
"In appearance and arrangement the remnants of the device seem highly similar to those of the hydrogen peroxide based devices of 2005. The size of the device and its containment in a plastic bucket is also the same."
Prof Michels said the "flash flame" that witnesses said tore through the carriage, causing dozens of injuries, suggested that the explosion was only partly successful.
"In particular much of the bucket still seems to be intact and there appear to be no victims with lethal impact wounds," he added.
"I must speculate that either the mixture was not of the right composition or that the ignition system was inadequate or not properly placed. The fact that much of the bucket is intact supports the latter possibility."
Al Qaeda have encouraged followers to use such lights in bomb guides published online.
Terror expert Will Geddes said: 'My suspicion is that Parsons Green was not the intended target.
"Unless a person knows it, it is not going to mean a great deal to you - if it was Paddington or Notting Hill, they are internationally recognised names."