May, the country's top domestic security official, said in a statement that the latest assessment was that a "terrorist attack is possible, but not likely" to be carried out in England, Scotland or Wales by Irish Republican Army dissidents.
However, she warned that the threat of attacks by IRA dissidents in Northern Ireland itself remained set at severe, the second highest point on the scale, which indicates an attack is highly likely.
May said that Britain's domestic spy agency, MI5, which is responsible for setting the terrorist threat levels, had made the decision "based on the very latest intelligence, considering factors such as capability, intent and timescale."
Dissidents from the Real IRA faction last attacked the British capital in August 2001, when a midnight car bomb in a West London nightspot wounded 11 people. Over the previous year the Real IRA had car-bombed a BBC building, bombed a bridge spanning the River Thames and fired a Russian anti-tank rocket at the headquarters of Britain's overseas spy agency, MI6.
Experts suggest that the failure of IRA dissidents' to attack London since then reflects the increased resources handed to British police and security agencies in the wake of the Sept. 11, 2001, attacks on the United States and the 2005 suicide bombings on London's transport network.
The downgrading of the threat level follows a successful operation by British police and intelligence agencies to protect the London Olympics—despite fears that the high-profile event would be a target for al-Qaida linked terrorists or Republicans dissidents.
"Despite the change which has been made today, there remains a real and serious threat against the United Kingdom from terrorism and I would ask the public to remain vigilant and to report any suspicious activity to the police," May told lawmakers in her statement.
Britain issues separate assessments of the threat from al-Qaida-related or international terrorism, and for risks linked to dissident Irish Republican Army members. It also publishes separate alert levels for the threat to mainland Britain, and to Northern Ireland itself.
May said the threat to the entire U.K. from international terrorism was regarded as substantial—the third point on the scale, meaning an attack is a strong possibility.