Terrorism: Plot to blow up UK Parliament foiled
The men, arrested in raids at houses in Birmingham, Stoke, Cardiff and London, had already carried out scouting missions.
Sources said that they were planning to unleash an "unsophisticated" arson attack using bombs designed to start fires.
Police arrested 12 suspects aged between 17 and 28 and said that the gang was also hell bent on wreaking havoc on Christmas shoppers by targeting UK high streets and shopping centers, the Daily Express reports.
The multiple arrests followed a long undercover investigation by MI5 which intensified within the past few weeks.
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."