Some 2,500 personnel will take part in the two-day live drill, which will echo the British capital's most deadly peacetime attack when four suicide bombers killed 52 people by detonating bombs on underground trains and a bus in July 2005.

The "Forward Defensive" exercise aims to mimic a scenario the authorities could witness in the event of a serious incident at the height of the Olympics, which begin at the end of July.

"Forward Defensive is at the very extreme end of the scenarios we could face," Cressida Dick, Britain's most senior counter-terrorism officer, told reporters.

"We will be doing our very, very best to prevent such an attack but it would only be right that we test our response to such an attack."

Britain has long been considered a target for Islamist militants while there is an enduring threat from dissident Irish republican groups who maintain an armed campaign against British rule of Northern Ireland.

The drill starting on Wednesday will see emergency services dispatched to a disused underground station in central London where the public will be able to witness "casualties" being brought up to the surface.

It will not only test the response of police, fire and ambulance staff but also the communication and coordination across the agencies, Olympic chiefs and government, including senior ministers.

Last year, an inquest into those killed in the 2005 attacks made a series of recommendations, including calls for training for frontline staff so they worked together better when faced with an incident on the London underground.

"We're seeking to learn from any experience that we can take as well as applying the lessons of the past," Security Minister James Brokenshire told Reuters.

The country is on its third-highest alert level of "substantial", meaning a terrorist attack is a strong possibility but this will almost certainly be raised to "severe", indicating an attack is highly likely, by the time the Games begin.

However, Brokenshire, Dick and National Olympic Security Coordinator Chris Allison, all stressed there was nothing to indicate any groups were planning to target the Games.

"It's important to say this exercise is not based on a specific risk," Brokenshire told Reuters. "It's not based on a specific evidence of a specific threat.

"It's ensuring that we're testing, that we're really stretching our preparations as much as possible so when it comes to Games time, we're as ready as we can be."

In December, Britain doubled the Games's security budget so it is now set to cost more than 1 billion pounds out of an overall total for the Games of 9.3 billion pounds.

Some 13,500 troops will form part of the huge security operation and on Monday the government issued an order allowing reservists to be called up to form part of this contribution.

• A Permanent Economic Emergency