Health Secretary Matt Hancock said on Monday more than 1000 cases of the new variant had been identified, mainly in southeastern England.
Although there was currently nothing to suggest the new strain was likely to cause more serious disease or that it would not respond to a vaccine, Hancock said that it could be contributing to higher infection rates.
"Over the last week, we've seen very sharp, exponential rises in the virus across London, Kent, parts of Essex and Hertfordshire," Hancock told the House of Commons in a statement, referring to counties near London.
"We do not know the extent to which this is because of the new variant, but no matter its cause, we have to take swift and decisive action," he said, announcing that the entire capital and some neighbouring areas would go into "High Alert" level.
Earlier this month, the government implemented a three-tiered system of restrictions in England to try to keep a second wave of the virus under control after a month-long national lockdown. More than 40% of citizens were placed in the highest risk category.
However London, whose 9 million people and world-leading financial centre make it the engine of the British economy, is currently only in the middle tier of restrictions.
SHARP RISE
The tougher Tier 3 restrictions will come into force in the capital from 12.01am on Wednesday. England's Chief Medical Officer Chris Whitty said the detection of the new variant was not the reason for the decision to put London in Tier 3 - the reason was the sharp rise in infections.
Whitty said there was no evidence that the clinical outcome was different for the new variant.
"There are many variants. It just happens that this one has quite a few more mutations than some of the other variants, so that's the reason why we've taken it particularly seriously," Whitty said during a news conference with Hancock.
The World Health Organisation (WHO) confirmed that Britain had reported the variant, but added that mutations were not uncommon, a view echoed by several other experts.
Martin Hibberd, Professor of Emerging Infectious Diseases at the London School of Hygiene & Tropical Medicine (LSHTM), said the reports were "not surprising and it was too early to say how important it is yet," adding it was believed that one previous mutation had let the virus to spread more easily.
DEEPLY DISAPPOINTING
The main difference between England's top alert levels is that bars and restaurants, which can stay open under certain conditions in Tier 2, must close their doors in Tier 3 and can only operate takeaway services.
There are also additional curbs on socialising in Tier 3, but workplaces and schools are told to remain open.
"Moving into Tier 3 before Christmas will be deeply disappointing for Londoners, and a terrible blow to the capital's hospitality, leisure and cultural sectors," said John Dickie, Director of Strategy and Policy at business campaign group London First.
London was one of the first parts of the country to be hit by the coronavirus during the initial peak between March and May, but until recently a second wave has been more concentrated in northern and central England.
Data published last week showed case rates per 100,000 people in London stood at 191.8, putting the city ahead of regions that have stricter rules in place, such as the West Midlands.
Based on that data, the government raised concerns about the spread of the virus in London schools and announced a programme of mass testing. Two London boroughs, Greenwich and Islington, have unilaterally decided to close their schools.
CHRISTMAS IN EUROPE
Governments across Europe are trying to navigate between avoiding spreading the coronavirus over the Christmas holiday season and allowing people to celebrate with family and friends.
Here are some measures that will be adopted for year-end festivities by some European countries:
BRITAIN
Up to three households will be allowed to meet at home from December 23 until December 27. People will be able to meet in places of worship and in outdoor public places but not at indoor hospitality or entertainment venues. Shops will be allowed to stay open for longer over Christmas and in January.
GERMANY
Germany will close beauty salons and most stores, leaving only essential shops open, from December 16 until at least January 10, Chancellor Angela Merkel says. Private gatherings will remain limited to no more than five people from two households, with rules to be eased over the Christmas holidays when up to 10 people will be allowed to gather, not counting children.
DENMARK
Restaurants, museums, cinemas and other cultural institutions will be closed in 69 of 98 municipalities, including Copenhagen, until January 3, affecting almost 80% of the national population.
THE NETHERLANDS
Netherlands is expected to impose tougher coronavirus restrictions before Christmas with schools and shops to be closed for a month, according to Dutch Media. Previously, the government extended on December 8 the limit of three adult visitors per household by one month until January 15. Restaurants and bars will remain closed.
ITALY
Italians will not be able to attend a midnight mass on Christmas Eve and will be only allowed to move between regions in emergencies over the holiday period starting on December 20. Swiss-Italian train routes were halted from December 10 as the requirements for travel exceed the capacity of train personnel.
Pope Francis's Christmas Eve Mass on December 24 will start two hours earlier, allowing the limited number of people who can attend to be home by 10pm.
GREECE
Hair salons and bookstores will reopen during Christmas, other restrictions continuing until January 7, with a curfew in place from 9pm to 5am and restrictions on movement between regions until next month, the government said on Dec. 7.
It added that churches would open for the Christmas and Epiphany masses on Dec. 25 and Jan. 6, with a limited number of worshippers.
FRANCE
France will lift its stay-at-home order on December 15 and replace it with a nightly curfew, which will be waived for Christmas Eve.
HUNGARY
Prime Minister Viktor Orban said on December 7 there would be no New Year's Eve celebrations. The country will maintain restrictions, including a 7pm curfew, until at least January 11.
PORTUGAL
There will be no limit on how many people will be able to gather per household for Christmas. The night-time curfew will be pushed back from 11pm to 2am on December 24 and December 25. For New Year's Eve (December 31), street parties will be banned and outdoor gatherings limited to a maximum of six people.
SPAIN
Up to 10 people per household will be allowed to gather for Christmas and New Year, relaxing the current rule that permits gatherings of up to six people.
Curfews will be pushed back to 1.30am from 11pm on December 24 and December 31. Movement between regions will be banned between December 23 and January 6, except for visits to family.
NORWAY
Norwegians will be able to invite up to 10 guests into their homes on two separate occasions between Christmas and New Year. Outside those days, the current limit of up to five guests in one home will apply.
AUSTRIA
Skiing will be allowed from December 24, but there will be no Christmas markets this holiday season.
BELGIUM
Belgian households will only be able to be in close contact with one extra person over Christmas. People living on their own will be able to meet two others. Fireworks will be banned on New Year's Eve to limit gatherings and foreign travel is strongly discouraged.
IRELAND Three households will be allowed to meet between December 18 and January 6, and the countrywide travel ban will be lifted for that period.
CZECH REPUBLIC The Czech government starting December 18 will launch free, voluntary testing for all citizens using rapid-result antigen tests to make family visits over Christmas safer.
