Prime Minister Theresa May called a meeting of the Government's Cobra emergencies committee within two hours of the Parsons Green blast.
The committee, being chaired by the Prime Minister in Whitehall's Cabinet Office, brings together senior ministers with security chiefs, police and officials.
Also understood to be attending are Home Secretary Amber Rudd and London Mayor Sadiq Khan.
Mrs May returned to Downing Street following news of the incident from her Maidenhead constituency, where she was spending the first day of the parliamentary recess.
In a statement issued by Number 10, the Prime Minister said: "My thoughts are with those injured at Parsons Green and the emergency services who, once again, are responding swiftly and bravely to a suspected terrorist incident."
The first minister to respond publicly to the incident was Foreign Secretary Boris Johnson, who issued an appeal for calm as the first news about a suspected blast trickled out, and before police had confirmed that they were treating it as a terrorist incident.
"Everybody should keep calm and go about their lives in a normal way, as normal as they possibly can," Mr Johnson said.
Mr Khan urged Londoners to "remain calm and vigilant" in the wake of the explosion.
He said: "Our city utterly condemns the hideous individuals who attempt to use terror to harm us and destroy our way of life.
"As London has proven again and again, we will never be intimidated or defeated by terrorism."
Senior politicians were quick to offer their condolences to those affected by the incident and to pay tribute to emergency workers and security services.
Labour leader Jeremy Corbyn said: "Thoughts with those injured in Parsons Green terrorist incident, and thanks to police, ambulance staff and firefighters who are responding."
Hammersmith MP Andy Slaughter said: "I took the rush-hour Tube through Parsons Green for over 20 years, always packed.
"Thoughts with all those caught up in a terrifying incident."