The order, issued following bombings last Thursday, caused some indignation in London after it was reported by a newspaper.
The move received criticism from police, politicians and tourism officials, who are determined to show that life is returning to normal there.
On Tuesday, it was announced that US troops in Britain had been told to stay away from the city.
All 12,000 members of the US Air Force stationed in Britain were banned from visiting London because of the bombings.
American military chiefs issued the "battle staff directive" on Friday, a day after the blasts.
A US spokeswoman was quoted as saying that military staff were not allowed to go anywhere inside the M25 orbital motorway belt surrounding the capital until further notice, "because the security of our people is our top concern".
"Family members who are US civilians and are not subject to orders are also being encouraged to stay away from London," the spokeswoman, Cindy Dorfner, had been quoted as saying.
The order had come as police raised the confirmed toll in the city's attacks to 52 and commuters returned to work on public transport.
The authorities said retrieving the bodies of victims killed in Thursday's morning rush-hour attacks continued to be a laborious process, with workers on Monday still pulling corpses from a mangled underground train deep beneath the streets of the capital.
About 700 people were injured in the Thursday attacks, 60 of whom remain in hospitals.
Many commuters said they would
use public transport as normal
British Prime Minister Tony Blair, addressing parliamentarians for the first time since the attacks, denounced what he called a "murderous carnage of the innocent" and said the evidence pointed to "Islamic extremists".
Blair said no specific intelligence was available that might have helped the authorities thwart the bombings, answering critics who have questioned the government's vigilance and readiness.
"Our country will not be defeated by such terror," he told the House of Commons. "We will pursue those responsible wherever they are and will not rest until they are identified and ... brought to justice."
Return to work
Many travellers said they would defy the attackers by using public transport as normal, but some were too afraid and took taxis instead.
"I ... will not let the attacks put me off," computer consultant Paul Williams, 42, said as he prepared to board an underground train in central London. "As far as I am concerned, it is just a normal day at work."
But Ted Wright, chairman of the British Poultry Council, said he was taking a taxi to avoid the London Underground railway system, commonly known as the Tube.
"In light of what has happened, I have decided to take a taxi. It will probably cost an extra six pounds ($10.70), but should hopefully put my wife's mind at rest."
The British Transport Police urged Londoners to return to work and reopen their businesses in defiance of the bombers.
Search for bodies
Mayor Ken Livingstone took the Tube to work on Monday to send out the message that Londoners should "carry on".
The search for bodies trapped
"We are going to work. We carry on our lives," he said. "We don't let a small group of terrorists change the way we live."
Police said they identified the first of the victims - Susan Levy, 53, of Hertfordshire, outside London. Forensics experts have warned it could take days or weeks to put names to the bodies, many of which were mangled in the blasts.
Transit officials said the number of passengers using the system on Monday morning was back to normal.
However, a few sections of the underground railway system affected by the attacks remained closed on Monday, and the number of shoppers in central London has fallen by about 25% since the attacks, British media reported.
British intelligence officials over the weekend met their counterparts from about two dozen countries to brief them on the attacks and the investigation, police said.
Security officials in Poland said they searched the home of a British citizen of Pakistani origin in the eastern Polish city of Lublin in connection with the bombings. Poland's Internal Security Agency did not release the man's name.
"In light of what has happened, I have decided to take a taxi. It will probably cost an extra six pounds ($10.70), but should hopefully put my wife's mind at rest"
Ted Wright, British Poultry Council chairman
A man with British and Moroccan nationality mentioned as a possible suspect told The Guardian newspaper in an interview published on Monday that he had nothing to do with the blasts.
"Over 30 years I have lived in Britain, I have never been involved in violence or crime," said Mohamed Guerbouzi, who was convicted in absentia in Morocco in 2003 and sentenced to 20 years in prison in connection with bombings in Casablanca. "I'm scared for my safety," Guerbouzi said.
Despite the ferocity of the attacks, scores of tourists wandered around London.
Sally Mathiesen, a professor from San Diego State University in California travelling with her students, said they had no plans to return home.
"We heard the explosion, and our students said 'it sounds like a bomb', and we said 'nah'," she said of the blast that tore apart a bus at Tavistock Square.
Police say they do not as yet
know who carried out the attacks
"Since then, all of the students have gotten back on mass transport."
As people mourned the missing and the dead, the leaders of Britain's Christians, Muslims and Jews urged conciliation, not revenge.
They met "to proclaim our wish to resist any form of violence and to work for reconciliation and peace", Cardinal Cormac Murphy O'Connor said.
Yet there were some reports of violence towards mosques around Britain, including arson attacks on mosques in east London, Leeds, Telford and Birkenhead which resulted in minor damage. There were also reports of damage at two mosques in Bristol.
Chris Fox, president of the Association of Chief Police Officers, said it was likely that there were other incidents that had not been reported.
"We encourage everyone to report this type of obnoxious and dangerous behaviour, from whatever quarter, for full police investigation as we are determined that there will be a very robust enforcement response to it," he said.