Sir Ken Macdonald said terrorist fanatics were not soldiers fighting a war but simply members of an aimless "death cult."
They think of themselves as soldiers and their cause is not aimless, but political.
The Director of Public Prosecutions said: 'We resist the language of warfare, and I think the government has moved on this. It no longer uses this sort of language."
London is not a battlefield, he said.
"The people who were murdered on July 7 were not the victims of war. The men who killed them were not soldiers," Macdonald said. "They were fantasists, narcissists, murderers and criminals and need to be responded to in that way."
His remarks signal a change in emphasis across Whitehall, where the "war on terror" language has officially been ditched.
Officials were concerned it could act as a recruiting tool for Al Qaeda, which is determined to manufacture a battle between Islam and the West.
The term "Islamic terrorist" will also no longer be used. Officials believe it is unhelpful because it appears to directly link the religion to terrorist atrocities.
How many times do they have to tell you? Their cause is religious and political at once. There is no separation between the two in Islam.