A new coronavirus variant is spreading rapidly through southern England, with London and parts of the commuter belt placed under tougher restrictions in response to soaring cases.
The capital and parts of Essex and Hertfordshire will face Tier 3 restrictions from Wednesday following "very sharp, exponential rises" in cases.
Health Secretary Matt Hancock told a Downing Street press conference the spread of the virus is "not good" and that the newly identified variant may be associated with the rise in the South East.
The Tier 3 restrictions will have a devastating impact on the capital's nightlife, with theatres forced to shut and pubs and restaurants closed apart from takeaway and delivery services.
Warnings to avoid travel to Tier 3 areas will also deprive some of the UK's busiest shopping centres of trade at the busiest time of the year.
The announcement moves almost 10.8 million people into Tier 3, with 61% of England's population under the toughest restrictions from Wednesday.
Mr Hancock acknowledged that the measures would be a "blow" to people and businesses, but said: "We know from experience that the best thing to do in the face of this virus is to act fast, not to wait to see its growth continue – and we do not rule out further action."
He went on: "This rise in transmission, as well as this new variant of Covid should be a warning to us all that even after such a difficult year, we must stay vigilant."
Chief medical officer Professor Chris Whitty said the decision to move London and parts of the South East of England into Tier 3 was not a result of the new variant.
"The reason Tier 3 is brought in is because the rates are going up very fast in many areas," he told the press conference.
"The variant may or may not be contributing to that but the reality of that is that it is happening across the board, and that's the reason for making the changes."
He also said people should consider their plans to mix with other households over Christmas "very seriously and go no further than they have to".
Mr Hancock earlier told MPs the new variant had been identified by experts and "initial analysis suggests that this variant is growing faster than the existing variant".
"We have currently identified over a thousand cases of this variant, predominantly in the south of England, although cases have been identified in nearly 60 local authority areas and numbers are increasing rapidly."
The Health Secretary said there was nothing to suggest the variant was more likely to cause serious disease and he suggested the vaccine should still be effective.
There had been similar variants in other countries and the World Health Organisation has been informed, he added.
Mr Hancock said it was necessary to move London from Tier 2 to Tier 3 to prevent the NHS being overwhelmed.
"Over the last week we have seen very sharp, exponential rises in the virus across London, Kent, parts of Essex and Hertfordshire," he said.
"We do not know the extent to which this is because of the new variant but no matter its cause we have to take swift and decisive action which unfortunately is absolutely essential to control this deadly disease while the vaccine is rolled out.
"In some parts of these areas the doubling time is around every seven days."
Hospitals across the capital, Essex and Kent were already "under pressure", he warned.
"We know that this doubling of cases will be mirrored in hospital admissions and it only takes a few doublings for the NHS to be overwhelmed."
Areas moving to Tier 3 are: Greater London; south and west Essex including Basildon, Brentwood, Harlow, Epping Forest, Castle Point, Rochford, Malden, Braintree and Chelmsford along with Thurrock and Southend-on-Sea borough councils; and the south of Hertfordshire including Broxbourne, Hertsmere, Watford and the Three Rivers local authority.
London Mayor Sadiq Khan said the decision was "incredibly disappointing" for businesses but urged the capital's residents to follow the rules.
He added: "The worst thing for London's businesses and our economy would be yet another full lockdown in the new year."
Badly-affected sectors of the economy hit out at the decision:
– Theatre impresario Sir Cameron Mackintosh has said the Government's decision to put London into a Tier 3 lockdown is "devastating" and "smacks of panic".
– Theatre star Elaine Paige, who is part of the cast of Pantoland at the London Palladium, which will be forced to close, said she is "devastated".
– Kate Nicholls, of trade body UKHospitality, hit out at the move which places an "unfair, illogical and disproportionate burden on hospitality businesses without effectively tackling Covid".
– The British Beer & Pub Association said 1,250 pubs in London which had remained open in Tier 2 would be forced to close.
Mr Hancock also faced criticism from Tories over the move.
Former chief whip Mark Harper, leader of the Covid Recovery Group of lockdown-sceptics, said: "I'm afraid that London and other parts of the South East moving into Tier 3 shortly shows that the current strategy to combat Covid isn't working."
Former Conservative leader Sir Iain Duncan Smith, MP for Chingford and Woodford Green, said hospitality venues had worked to control the virus, urging Mr Hancock to "seek some kind of flexibility within this so it targets better the real risk and doesn't just hammer those that have been doing the right thing".
The chief executive of the NHS Confederation, Danny Mortimer, questioned whether "these rules will be enough to protect the population in the short term".
He said: "This is particularly true given that we are less than two weeks away from restrictions on household socialising being eased significantly over the festive period.
"A close eye on enabling the public to follow the rules, such as by providing the home testing kits in the hardest-hit areas, is needed, as is ongoing support for the NHS to cope with the ripple effects of these restrictions elsewhere, including further disruption to elective waiting lists and on people's mental and physical wellbeing.
"We are fortunate to be the first country in the world to be rolling out a coronavirus vaccine but it will take time for hospitals and primary care sites to immunise the high-risk groups and so now (is) a time for increased vigilance and realism."
The Government announced that a further 232 people had died within 28 days of testing positive for Covid-19 as of Monday, while there were a further 20,263 lab-confirmed cases of coronavirus in the UK.
The worrying rise in cases came as GP surgeries in England began vaccinating people against coronavirus and Mr Hancock urged people not to "waver as we enter the final stretch" of the fight against Covid-19.
GP practices in more than 100 locations were administering the Pfizer/BioNTech vaccine, with the over-80s among those called up to receive the jab.
Care home residents in Scotland began to receive the Pfizer vaccine on Monday, while those in England's care homes can expect to see roving teams administer the jab from later this week.
Dr Nikita Kanani, director of primary care at NHS England, urged all those expecting to receive the vaccine to be patient and wait to be called up by their GP.
"There's a huge range of things that general practices are already doing so if we can ask for people to just wait a moment and wait to be contacted that would be very appreciated," she told BBC Radio 4's Today programme.
The vaccination centres will operate from doctors' surgeries or community hubs in villages, towns and cities, and come after more than 70 UK hospital hubs began administering jabs.