By Martin Robinson (additional reporting below)
The suspected Parsons Green bomber was a "problematic foster child" who was allegedly arrested two weeks ago near to where the attack took place before being freed.
Police are searching a house in Sunbury-on-Thames, Surrey, after the 18-year-old was detained in the "port area" of Dover earlier today while apparently attempting to leave the country.
The home raided by police in connection with the attack, which injured 30, is owned by a couple who were both appointed MBEs for fostering hundreds of children, reports Daily Mail.
Penelope Jones, 71, and her husband Ronald, 88, have raised 268 foster children in the house over three decades and the last eight have been refugees.
Officers stormed the house on Cavendish Road at 2pm around six hours after apprehending the suspect in the departure lounge of the Port of Dover.
Around 60 people were evacuated from near the house, where locals claimed "explosives" were found in the garden. There is no suggestion the Joneses had any knowledge of any alleged wrongdoing at the property.
Close friends of pensioners Penny and Ron Jones said the couple - who are widely respected in the local area - were at 'their end' with the teenager.
Serena Barber, 47, who has known the couple all her life and lives in a property backing on to theirs, said: "They have two boys at the moment, both are foreign. One is very quiet and polite, the other who is 18 is awful.
"I know about two weeks ago he was arrested by police at Parsons Green, for what I don't know and returned back to Penny and Ron. After that Penny said she was going to have to stop caring for him, she couldn't handle him."
The development comes as police revealed they are "keeping an open mind" on whether there was more than one person responsible for the bombing.
Metropolitan Police Deputy Assistant Commissioner Neil Basu said: "At approximately 7.50am local police officers in Kent arrested an 18-year-old man in the departures area of the port in Dover.
"He was arrested on suspicion of being concerned in the commission, preparation and instigation of acts of terrorism and transferred to custody in a police station in London.
"Officers from Kent police had to partially evacuate the port of Dover at 11am this morning. That work is now complete and they have recovered a number of items during that search.
"At around 1.40pm with the assistance of Surrey Police, we evacuated a house on Sunbury-on-Thames. As a precautionary measure we evacuated the surrounding buildings.
"I want to reassure that community that our experts are quickly and thoroughly searching that address.
"At this stage we are keeping an open mind about whether more than one person is responsible for this attack and we are still pursuing multiple lines of enquiry at pace."
Deputy Commissioner Basu revealed police have received 180 photos and videos and located 121 witnesses - 100 of whom they have spoken to already.
Sunbury-on-Thames is just a 37-minute train ride from Wimbledon station, where the tube that was bombed yesterday began its journey.
Residents on Cavendish Road were evacuated and asked to find somewhere to stay for the evening. Staines Rugby Club has been set up as a meeting point.
Residents in the outer cordon were allowed home at 8pm after they had given their names and proof of address to police.
They were told once they were in their houses they must stay there unless absolutely necessary, and sign in and out of the cordon until it was lifted if they had to leave.
Residents closer living closer to the house were asked to find alternative accommodation for the night.
Neighbour: 'Police had been at house before'
Stephen Griffiths, 28, who lives across the road from the house that was raided, told MailOnline that "police had been at the house numerous times in recent weeks - sometimes spending 'hours' at the property".
He also saw officers using drones to search the garden at the back of the property.
He said: "Police have been at this address a few times in the last couple of weeks.
"At the time we just put it down to it being foster kids that needed to be spoken to.
"But it clicked in my head earlier - what if one of the children was under investigation or surveillance?
"Why couldn't something be done sooner to stop this happening? Why couldn't the police have questioned him?
"Three or four officers would turn up and would speak to the foster parents on the doorstep.
"They were in normal police cars but they weren't wearing police hats or reflective jackets - they were dressed all in black.
"It was nothing like just a normal officer doing a duty call, it seemed like something a bit higher in the chain.
"The other day they were out there for a long time - a few hours - and they could have even gone in the house."
Brenda Matthews, 53, was told by police to pack essential items and find somewhere to stay for 12 hours while specialist officers raided the property.
She said: "I looked out this morning and saw men with bandannas. I asked what was going on and a neighbour told me it was a terrorist raid.
"Everyone knows everyone round here. The house involved is blocked off, police are knocking on doors to try and basically get everyone out and to safety.
"The scary thing is how long have these people been living in this house for? I've lived here seven years."
Mrs Jones is the governor of a local school and became a foster mother after working in a juvenile prison and was always supported by her husband.
The couple featured in an interview with Elmbridge CAN, a community group which aims "to build a culture of welcome to refugees" and help settle them in the local community.
The organisation states that Mr and Mrs Jones have been foster parents for almost 40 years and had taken in 268 children - the last eight of which were refugees. It is not clear when the interview was published.
In the interview Mrs Jones said fostering "had its ups and downs", adding: "They're all children, it doesn't matter if they're sky blue or with pink dots on them - they just need to be loved."
Mojgan Jamali, who lives on the road where the house was raided this afternoon, said police gave her just 'one minute' to pack her bags, grab her children, and leave her home.
She said: "We didn't know what was going on. There was a lot of rumours going on, a lot of stories, people saying this and that, but we didn't know."
Another neighbour, who did not wish to be named, told MailOnline police vehicles swooped on the street as she was making her way to a local Tesco store. We thought it was a drug raid, but the police would not tell us anything.
"We tried driving around but they had blocked of part of the road and they said that we really need to go right down [to the other end of the road].
"When I was leaving they were knocking on all the doors. A police sergeant told us that they had found an explosive device."
A 32-year-old woman who lives locally told MailOnline she was ordered to leave her mother's house after getting a knock on the door from a police SWAT team.
"My brother got a bang on the door about half past one by a swat team and they were told to leave immediately.
"We are waiting outside on Catherine Drive there now. Everyone is cold and just waiting to see when we can go back home. The couple in the house are lovely, they've be fostering kids for years since I was little."
A woman, who lives opposite, added: "I am so worried about Ron and Penny, they are a lovely couple. I hear they have been taken away for questioning. I don't understand."
At 8.20am on Friday, a bomb left by a suspected terrorist detonated on the tube at Parsons Green in west London, injuring 30 people.
Two hours afterwards, the Metropolitan Police said they were investigating a terrorist incident.
On Friday evening, the Islamic State claimed the attack, saying it had been carried out by their "soldiers", although the group has made false claims in the past.
Theresa May raised the UK's threat level to critical on Friday night and soldiers were deployed to guard key sites, such as nuclear power stations, to free up armed police for regular patrols.
These are the updates since then -
• Parsons Green underground station reopened on Saturday morning following the attack at 8.20am on Friday;
• 18-year-old "suspected bomber" was arrested in Dover at 7.50am and at 2pm police stormed house in Sudbury;
• The Metropolitan Police said officers 'open minded' about whether more than one person was responsible;
• Police have received 180 photos and videos, located 121 witnesses and have spoken to 100 of them already;
• Public have been told to dial 999 or call the anti-terror hotline on 0800 789 321 if see anything suspicious.
Home Secretary Amber Rudd described arrest of the 18-year-old at 7.50am in the Dover port departure lounge as "very significant", but added: "The operation is ongoing."
The suspect was taken to a local police station and will be transferred to south London during the course of the day, officers said.
One witness said the man was arrested in the ticket office at the port.
She told The Sunday Mirror: 'He was surrounded by about seven police officers as he went to buy a ticket. It was all done very quickly and quietly.
"I couldn't really see who he was or what he was wearing as they were all around him.
"I didn't realise what it was at the time. It's only after and heard it on the news I realised what it was."
Tourist Daniel Vaselicu, 31, said the man appeared calm as the officers two unarmed interrogated him for 10 minutes before arresting him minutes later.
Police were seen searching bins outside Dover Priory railway station on prompting suggestions the suspect may have arrived in the town by train.
The station also has CCTV cameras positioned in and outside the building. The station is a 30 minute walk to the port. Police officers also searched industrial bins at the Dover ferry passenger terminal.
Officers were pictured lifting plastic carrier bags out of the bin and examining them before putting them back.
Security minister Ben Wallace said today the threat level has been raised to critical because a new attack is likely to be "imminent" as an increased presence of armed officers was seen in cities across the country.
But he piled the pressure on police for not releasing CCTV footage of the attacker, describing it as a 'useful' tool in identifying suspects.
He said on BBC Radio 4's Today show this morning: "I totally agree that CCTV footage is useful but that part of the investigation I leave with the police and security services."
It was the middle of rush hour on Friday when the crude bucket bomb - which had a timer - went off at 8.20am inside a tube train packed with commuters, including schoolchildren and a pregnant woman.
The train is regularly packed full of schoolchildren. The Fulham area serves at least three state secondary schools: Fulham Boys School, The London Oratory and Lady Margaret Hall along with a number of independent schools.
Terrified passengers were left covered in blood with scorched hands, legs, faces and hair - others suffered crush injuries during a stampede as they "ran for their lives" over fears the 'train would blow up'.
London Ambulance took 19 patients to hospitals, while the others went in themselves.
The four hospitals dealing with patients were Imperial, Chelsea and Westminster, Guy's and St Thomas' and St George's.
An officer at the scene on Friday told MailOnline: "We believe there is a second bomb - there is a man with knives on the loose."
In a pre-recorded television statement released around 8.30pm, Mrs May said military personnel would replace police officers "on guard duties at certain protected sites which are not accessible to the public".
She said: "The public will see more armed police on the transport network and on our streets, providing extra protection.
"This is a proportionate and sensible step which will provide extra reassurance and protection while the investigation progresses."
Speaking moments afterwards, Assistant Commissioner Mike Rowley said: "We are making excellent progress at the moment as we pursue our lines of inquiry to identify, locate and arrest those responsible.
"We have hundreds of police officers trawling through CCTV footage, detectives have spoken to tens of witnesses and we have taken a large number of calls to the hotline... from members of the public.
Theresa May raises terror threat level to its highest possible
Mrs May said in a statement from Number 10 on Friday night -
"The Joint Terrorism Analysis Centre has now decided to raise the national threat level from severe to critical - this means their assessment is that a further attack may be imminent.
"The public will see more armed police on the transport network and on our streets, providing extra protection.
"This is a proportionate and sensible step which will provide extra reassurance and protection while the investigation progresses."
Donald Trump tweeted just hours after the blast that police had the attacker 'in their sights' and should have been "more proactive" in catching "the loser".
Scotland Yard hit back and said Mr Trump's comments were 'pure speculation' while senior officers refused to name the suspect.
The President later adopted a more conciliatory tone in another tweet last night saying, "our hearts and prayers go out to the people of London".
Mrs May also hit out at the President's tweet, calling it "unhelpful", and has this evening discussed the intelligence sharing between the two countries with the President in a telephone call.
Witnesses to the explosion said there was a loud "bang", a flash and then a ball of flame engulfed surrounding passengers on the 'packed' District Line train.
Gillian Wixley, 36, who lives in Putney, was eight seats from the explosion. She said: "It was chaotic: There was lots of people panicking and people were injured due to the crush.
"Everyone was very emotional. There was one boy maybe age ten who was commuting to school on his own. He was sitting on the floor sobbing.
"He was obviously in shock and very scared. Everyone around him was trying to calm him down and help him."
Lady Margaret Hall schoolgirl Emanuella Mensah, 16, described the panic. "I was right outside the corner shop when people started running from the station.
"People were shouting 'run, run'. I saw old people, people with their kids. Then someone shouted 'terrorist!'. More people kept coming out of the station.
"There were people sitting on the pavement crying and in hysterics. Schoolgirls were coming from all kinds of directions. The teachers came down and we started escorting people into school."
She said the younger children were particularly shocked and scared and that the distress carried on throughout the day.
"Years seven, eight and nine, they were all on the phone trying to call their parents. People were crying everywhere.
"The teachers were putting them into rooms, giving them water and biscuits, trying to keep them calm. They tried to keep everyone going to their lessons but people couldn't concentrate."
Luke Warsmey said: "The explosion was like a large match going off at the end of the carriage. People just started sprinting. It was every man for himself when that happened.
The burn victims had severe leg injuries.
"It was a very busy commuter train, young and old, school children going to their schools. I saw was nannies trying to look for kids, because of the rush of people just taking five and six year olds away from them and they were trying to look for them.
"There were lots of injuries from people being trampled on and everyone who had been close to it had the same burns to their head."
Emma Stevie, 27, described a "human stampede" after the bomb went off. She said: "I heard lots of screams and people saying 'run, run'. We got out and then there was a human stampede, down the stairs.
"There were people lying underneath getting crushed, a big human pile-on. I wedged myself in next to a railing. I put myself in the foetal position. I kept thinking, 'I'll be ok, I'll be ok'.
"There was a pregnant woman underneath me and I was trying really hard not to crush her."
Ryan Barnett, 25, who was further up the train, recalled: "I was sitting there, headphones in, at Parsons Green, the doors open fine, I'm not really paying attention, and all of a sudden hundreds of people run past me screaming a mixture of 'stampede', 'attack', 'terrorist', 'explosion', 'get off the train', 'everyone run'."
He made it to the staircase but stewards were shouting 'stop, stop, stop' and it turned into what another witness called a mass pile-up.
Mr Barnett said: "People were falling over, people were fainting, people were crying. There were little kids clinging on to the back of me." In the chaos, he said a pregnant woman lost her shoes and fell over.
"There was sheer pandemonium and panic," added passenger Neil White, while another witness told LBC radio: "I was helping a lady up and she was unconscious - she was just getting trampled."
Richard Aylmer-Hall told Sky News: "There were a few crush injuries on the stairs. People got squashed and crushed going down the stairs. Police evacuated everyone from the scene pretty quickly.
"There was screaming, pushing and shoving - it was a like there was a terrorist on the loose with a gun or something - lots of people were in tears. When it was all over lots of people were being comforted and looked after. It was total chaotic panic.
"A lady who had been on the same carriage as the device described it going off - a puff of smoke and flames coming out of it."
Couple Lucy, 24 and Fabin, 29, were on their way to work when the explosion happened.
Lucy, who works in PR, said: "We just heard screaming and sprinting, there was a stampede on the stairs and people were falling over, there was a schoolboy being lifted up after he had fallen down, he was in his school uniform, he must have been about ten, he was crying and distressed."
Fulham fitness instructor Niyi Shokunbi, 24, was in the next carriage the moment the bomb went off.
He told MailOnline: "I have never seen anything like it was like something out of a film. I thought it was an acid attack. It happened like bang within ten seconds, I just wanted to run.
"I went towards the carriage where the bomb went off a woman said you don't want to go in there. I saw a little boy with scratches on his face crying for his brother. A woman was bleeding. Everyone was running. I've never seen anything like it."
Luke Walmsley, a 33-year-old video editor, said: "It was complete pandemonium, complete terror. They didn't open the gates and the Underground staff did not understand what was going on. People were shouting 'He's got a knife! He's got a knife!' I didn't see anyone with a knife."
He added: "In the immediate seconds there were people running and shouting, it was just like where do you run to?
"People were rushing down the platform, everyone was doing a 100metre sprint. There were lots of injuries from people being trampled on.'
Accountant Sarah Hickson, 31, who was on her way to work from Putney to Paddington, said: "I heard everyone screaming 'Run, run, run!' and the whole Tube went into frantic panic.
"Everyone was sprinting for the exit and someone was screaming, 'There's a man, there's a man!' One person tried to climb over the railings and over everyone else. It was total chaos.
"There was a pregnant woman and a little boy of about ten. His face must have been crushed against the concrete stairs because when he stood up he had grazes all over his face. It was horrible."
She added: "Transport for London staff were doing their best to get control but everyone was screaming, trying to get out.
"Eventually they managed to get some calm and people moved ever so slightly back, allowing the boy and pregnant woman to get up.
"I am physically OK but shaken up, it was a scary experience." Insurance broker Grace Watts, 27, from Fulham, said: "Everyone was being shoved and squashed then someone at the bottom started shouting at us to get back up.
"It wasn't a member of staff, but in the panic everyone assumed that there was an attack going on outside the station, and we were stuck in between.
"There were some five or six boys from the London Oratory School - they were only 11 or 12 years old - who had cuts and bruises from the crush. It was sheer panic.'
She added: "There was one girl who was running down the stairs who got pushed right over and cut her leg. She looked like she was in a lot of pain. Instinct just kicked in - I thought there must be a bomb or a gunman so you just get away as quick as you can.
People were terrified. It was really scary."
Sixth form student Wella Mensah, 16, said people were "on the floor outside crying" with scorched faces.
Wella, who attends nearby Lady Margaret School, said: "I was under the bridge the train was on. I was looking and people just started running past me.
"I saw a bunch of girls. I asked if they were OK and they said there was a terrorist on the train and there was a fire."
Commuters on the train behind witnessed terrified passengers sprinting away up the tracks. Nicole Linnell, 29, who works for a fashion label, said: "We saw people running down the tracks. About 30 or 40 people. It was absolutely terrifying.
"Running on the tracks is the last thing you want to do, so we were like 'What's going on?'
"After about an hour we were evacuated off the train on to the tracks, about ten to 15 people at a time."
Still online: The simple plans for a bomb that could wreak carnage
By Vanessa Allen, Jason Groves and Isabella Fish
Terror manuals detailing how to build a "fairy light" bomb were easily available via Google on Friday night.
The vile "how to" guides were readily accessible despite repeated calls for the internet giant to remove links to the sites.
Fanatics set out step-by-step guides of how to build a bomb similar to the device used on the Tube yesterday, using fairy lights as a crude detonator.
Theresa May - who said "enough is enough" after the London Bridge atrocity - will put fresh pressure on Google, Facebook and Microsoft next week, when she and French President Emmanuel Macron host an anti-extremism summit with the internet giants in New York.
Daily Mail journalists were able to find the manuals online within seconds - despite repeated warnings that they have been used to commit terror outrages, and counter-terrorism chiefs saying it is "critical" that would-be terrorists are blocked from accessing them.
The manuals detailed how to use basic household items to make "an effective bomb that causes damage to the enemy" and said followers could use the devices to "kill tens of people".
Last night, Tory MP Jacob Rees-Mogg called for Google to be held criminally liable.
Additional reporting - Richard Spillett, Rory Tingle, Amie Gordon, Katie French, Stewart Paterson, Joe Sheppard and Scott .Campbell