he UK's terror threat level has been raised from "substantial" to "severe" in response to conflicts in Iraq and Syria, Home Secretary Theresa May says.
The new alert level means an attack on the UK is "highly likely", although Mrs May said there was no intelligence to suggest an attack was "imminent".
It is the second highest of five possible UK threat levels.
PM David Cameron said new legislation would make it easier to take passports from those travelling abroad to fight.
The home secretary already has the power, under the Royal Prerogative, to withhold a passport if it is in the public interest to stop somebody travelling.
That power has been used 14 times between April 2013 and the end of March 2014 to stop people travelling abroad for alleged terrorist-related or criminal activity.
'Gaps in armoury'
In a Downing Street press conference on Friday, Mr Cameron said Islamic State (IS) extremists - who are attempting to establish a "caliphate", or Islamic state - represented a "greater and deeper threat to our security than we have known before".
"We could be facing a terrorist state on the shores of the Mediterranean and bordering a Nato member."
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 that 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".
Assistant Commissioner Mark Rowley, the Association of Chief Police Officers' lead for counter-terrorism, said security and protection measures were being increased following the increase in the threat level.
And efforts are currently under way to identify a suspected British jihadist who appeared in IS footage of the killing of US journalist James Foley.
Prime Minister David Cameron announced new measures to tackle terror suspects
Mr Cameron said the murder of Mr Foley was "clear evidence - not that any more was needed - that this is not some far-off [problem], thousands of miles away, that we can ignore".
He said Britain must couple a "firm security response" with an "intelligent political response", but warned the fight against the extremists would last "years and probably decades".
Mr Cameron did not give extensive details on what the changed threat level would mean, stressing people "should continue to go about our lives in the normal way".
But he said people "might see some changes in terms of policing and the number of armed police".
More steps to deal with the threat would be announced on Monday, Mr Cameron said, adding there were "gaps in our armoury" which needed to be strengthened.
"We need to do more to stop people travelling, to stop those who do go from returning, and to deal decisively with those who are already here," he said during a Downing Street press conference.
'Attacks against West'
Earlier in a statement, Mrs 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 those plots are likely to involve foreign fighters who have travelled there from the UK and Europe to take part in those conflicts.
"The first and most important duty of government is the protection of the British people."
She added that "the British public should be in no doubt that we will take the strongest possible action to protect our national security" and urged people to remain vigilant.
The raised threat level may not lead to visible signs of change on the streets - but it is a sign of the increased concern and security activity behind the scenes involving all of the UK's intelligence and security bodies.
The last time the level was this high was between January 2010 and the summer of 2011. This may have been linked to attempts by an al-Qaeda affiliate to smuggle bombs on to planes heading out of the Middle East.
The highest level is "critical"- meaning an attack is expected imminently. Officials have twice put the country on such an alert - in 2006 after the discovery of liquid bombs aimed at airliners and then the following year when extremists attempted to bomb Glasgow Airport and London's West End.
In other words - if security chiefs had knowledge of a clear threat they could not contain, the level would already be one notch higher.
Mrs May stressed the decision to raise the threat level was made by the Joint Terrorism Analysis Centre (JTAC).
She added: "JTAC's judgements about that threat level are made on the basis of the very latest intelligence and are independent of ministers."
"JTAC has today raised the threat level to the UK from international terrorism from substantial to severe.
"That means that a terrorist attack is highly likely, but there is no intelligence to suggest that an attack is imminent."
Increased patrols
AC Rowley said: "From this afternoon we will begin to increase our levels of visible patrols and implement other security and protection measures.
"We will also build on existing community relations to provide reassurance and seek their support and assistance in keeping the UK safe."
He urged communities and families to report anyone who is "vulnerable, a danger or escalating towards terrorism" by calling the Anti-Terrorist Hotline on 0800 789 321.
Critical - attack expected imminently
Severe - attack highly likely
Substantial - attack a strong possibility
Moderate - attack possible but not likely
Low - an attack unlikely
Source: Home Office
The terror threat was raised to "critical" after the 2007 attack on Glasgow Airport
BBC security correspondent Frank Gardner said those who had travelled to Syria had mixed with "extremely violent people" and that there was no way to follow them all once they return to the UK.
The terror threat level has been made public since 2006 and has twice been raised to "critical" - in August 2006 after police uncovered a plot to blow up passenger planes, and in June 2007 after an attack at Glasgow Airport.
The level last changed in July 2011 when it was reduced to "substantial".
• The Joint Terrorism Analysis Centre (JTAC) is the UK's independent body for assessing terrorist activity at home and abroad
• Created in 2003, it is based at the headquarters of the Security Service (MI5) at Thames House in central London
• It sets threat levels and issues warnings to ministers and government agencies
• Comprises counter-terrorism experts from the police and 16 government departments and agencies
• Works with the International Counter Terrorism Branch, which investigates terrorist activity in the UK, in its assessment of threat levels
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