Officials in London have unveiled a terrorism plot to bomb the London Eye and the Houses of Parliament.

The men, arrested in raids at houses in Birmingham, Stoke, Cardiff and London, had already carried out scouting missions. An AP report says they were planning to unleash an "unsophisticated" arson attack using bombs designed to start fires.

UK Police arrested 12 suspects aged between 17 and 28 and said the gang was also hellbent on wreaking havoc on Christmas shoppers by targeting UK high streets and shopping centres.

Intelligence sources said plans for the attacks, designed to hit shopping hotspots at the height of the Christmas rush, were at an "advanced stage" and in "multiple locations." Possible targets included London's Oxford Street, Brent Cross in north London, Bluewater in Kent, Westfield Merry Hill in the West Midlands and Birmingham's Bullring. 

Scotland Yard's head of counter-terrorism, John Yates, said: "They were all arrested under the Terrorism Act 2000 on suspicion of the commission, co-operation and instigation of acts of terrorism."