I work in the City of London and, on any given day of the week, I'll have anything from an OM1 to a D700 in my bag and I will take photos of whatever the hell I like, so long as it's in a public place.
I have been stopped and questioned on numerous occasions, often around Liverpool Street station, to where and from where I commute every weekday. I have 'learned' and I accept that train stations, bus depots, etc. are not 'public' places and that if you want to photograph in those places, you have to obtain express permission.
However, as I understand it, the Police need a court order to stop you photographing in a public place or to confiscate any equipment.
The main problem seems to be the 'Plastic PCs' (Police Community Support Officers) that wander around being little more use than an ashtray on a motorbike. Maybe I've been unlucky but they are the ones who seem to want to exercise what little influence they feel they have as a result of dressing up a bit like a policeman.
The ones I've been unlucky enough to encounter have told me that what I'm doing is illegal, that I 'have' to delete my images (difficult if I'm using a film camera) and that they have the 'right' to see what photos I have taken (again, difficult if I'm using a film camera). All of this is absolute tosh. Challenge them. Push back and make them prove it. They are there because we citizens are the ones who pay their wages.
I detest and resent like being followed and harrassed by supposed authority figures who seem to have their own perverse agendas, and I will not be driven from my favourite hobby - especially when what I am doing is completely innocent and law-abiding.
Good luck to all who stand up against 'big brother' tactics.