The explosive device found hidden in a printer cartridge on board a cargo plane at a UK airport could have blown a plane out of the sky, the Home Secretary said.
The bomb was "viable" and the target may have been the aircraft itself, Theresa May said following a Cobra meeting of the UK Government's emergency planning committee to discuss the security situation.
A major international terror alert was sparked on Friday after printer cartridges with wires attached were found in cargo hubs at East Midlands Airport in the UK and in Dubai.
The packages originated in Yemen, a key front in the fight against terrorism, and are believed to have contained the powerful explosive PETN.
This is the same chemical used by the so-called Underpants Bomber in the alleged plot to blow up a plane over Detroit on Christmas Day last year.
Police in Dubai said the device there contained an electric circuit linked to a mobile phone chip as well as the compound lead azide, which can be used in detonators.
Ms May said the initial investigation of the device was now complete.
She said: "I can confirm the device was viable and could have exploded. The target of the device may have been an aircraft and, had it detonated, the aircraft could have been brought down.
"But we do not believe that the perpetrators of the attack would have known the location of the device when they planned for it to explode. Our investigation remains sensitive. We will continue to work very closely with international colleagues to develop our understanding of what was planned and of course to bring to justice those responsible."
The Metropolitan Police said initial tests indicated the package was a "viable explosive device" with the "potential to bring down an aircraft in flight if detonated". The Met's Counter Terrorism Command is in close liaison with agencies both in the UK and abroad.