A dossier, compiled by former Met commander Brian Paddick in 2004, warned police chiefs that they needed to take tougher action to stop officers discriminating against black people.
The report, obtained by the Guardian, said that innocent African-Caribbean people were being targeted too often under stop and search powers by officers who were wrongly racially stereotyping them as criminals.
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The threat level has been raised to critical by MI5's Counter-Terrorism Analysis Centre.
Prime Minister Theresa May announced the decision from Downing Street.
A man, apparently armed with a small axe and a large stick, was detained close to the event and police cleared the area as a precaution.