Commuters said they were only yards from the device - thought to be 20 to 30 feet up the staircase - at Hampstead station, north London, despite police claims that it had been evacuated safely. No injuries were reported but scores of people were thrown into panic.
Police said the explosion happened at about 4.48pm. A coded warning was telephoned to the Press Association at 4.32pm. A second warning was received by the Samaritans. A man claiming to be from the IRA warned of bombs at Hampstead and Archway Underground stations, but did not say when they were due to go off.
Chief Superintendent Tony Buchanan said: 'Clearly, it is murderous behaviour. There could have been a large number of casualties. There was not enough warning given. Lives were put at risk and we are very fortunate there were no deaths or injuries.'
Ruth Clackson, of Hampstead village, said the blast happened as she waited for a lift to take her to the ground level exit. Hampstead is one of the deepest stations in London. A London Transport official said they were trying to start the lifts but he said nothing about a bomb or a warning.
'We were still standing in the lift with the doors open when the bomb went off. It was very close. I've never heard anything like it. There were young girls in there screaming their heads off but no one did anything to help.
'Two trains went through after the bomb exploded and at least one must have stopped because people were still coming towards the lift.'
Ms Clackson said passengers climbed stairs but there were no officials orchestrating the evacuation. 'When we got to the top someone said: 'If you're feeling woozy, walk down to the Royal Free Hospital.' There were people near to collapsing.'
Michael Bodman, 20, of East Acton, arrived just after the explosion. 'The train stopped and a guard told everyone to get back on the train. We got back on but then he told everyone to get off and run up the stairs. The train was about semi-full.
'I got off and tried going for the lift but I saw people just standing there and it obviously wasn't moving so I made my way up the stairs. There was smoke and rubble and I couldn't see what I was going up into. No one guided us up and I didn't see any officials until I got to the top. The guard who told us to get off the train disappeared.'
An Underground spokesman said passengers were told to leave the station. 'The passengers down there were ushered on to a train, the train doors closed, the staff stayed on the platform, and as the train was about to pull out there was an explosion. The guard, because it was thought that the explosion was under or on the train, opened the doors.'
Passengers were then directed to the three working lifts, although 'there were some people who slipped through and made their own way up the staircase'.
A soldier at a checkpoint at Cookstown, Co Tyrone, was given a tin of chocolates by a motorist last night. On his return to base, suspicions were aroused and an Army expert defused a 1kg Semtex bomb hidden inside.