"BUT, if there was no chatter and London was caught completely off guard, what are the chances of having an
terrorist operative inside the British Government/Scotland Yard/SIS?"
According to PBS radio station early this morning(~6:30), Scotland Yard did forwarn Israel right before the blasts occurred so they had a short warning of some sort and at 6 AM they were saying it was Al Quada, no doubt.
I think Scotland Yard should check out their translators.
"Scotland Yard did forwarn Israel right before the blasts occurred"
Do you have any more info on this? It they had enough info to warn the Israeli's, why not warn civilians?