Anti-terrorist police said the alleged bomb plot uncovered on Tuesday, involving half a tonne of ammonium nitrate fertiliser, was not linked to the March 11 Madrid bombings which killed more than 200.
But Spanish Interior Minister Angel Acebes said a possible connection to one of the British suspects was being investigated.
One of the eight men held all of whom are British citizens had been tipped as a future county or even England cricketer.
Omar Khyam, 22, a computer student, had captained Sussex under-18s. His 17-year-old brother Shujah Khyam was also held in dawn raids in Crawley, Sussex. Their cousin Ahmad Khan, 18, who was also held, cried for his mother as he was arrested by anti-terror police in the raids. All three were being questioned yesterday with five other men at high security Paddington Green police station in London.
Ahmad's father Ansar Khan, 48, a taxi driver who works at Gatwick Airport, said there was "absolutely no truth" in the allegations against his son and nephews.
Mr Khan accused police officers of acting "like terrorists" when they raided his home at 6am and said he was "very angry".
He said: "They explained nothing the warrant was shown after 20 minutes and they wouldn't even let me answer the phone."
Mr Khan said his son Ahmad was a "very quiet boy" and a "good Muslim" who prayed five times a day.
He criticised teaching at local mosques and said he had tried to encourage his son to read books instead.
Mr Khan also made a startling claim that operatives from MI5 had recently approached his nephews, Omar and Shujah, and told them they should leave Britain and go to Pakistan.
The family had bought tickets for the boys to return to Pakistan, and they had been due to fly out next month, he claimed. But security sources dismissed the claims. In 2000, when Omar was 18, he told his mother he was going to France on a study trip but instead travelled to Pakistan. His family flew out and brought him back after around six weeks.
More than 700 police officers were involved in 24 raids in Tuesday's operation, code-named Crevice.
The suspects, aged 17 to 32, all British and of Pakistani descent, were held under the Terrorism Act 2000 on suspicion of "being concerned in the commission, preparation or instigation of acts of terrorism".
The ammonium nitrate fertiliser the same explosive ingredient used in terror attacks in Bali, Turkey, Saudi Arabia, Africa and the US was found at a self-storage unit in Hanwell, west London.
Police and security chiefs believe a series of "spectacular" terror attacks, including truck bombs, could have been launched within weeks by supporters of Osama bin Laden's al-Qaida terror network.
Security experts believe "soft" populated targets such as pubs, nightclubs and shopping centres may have been the focus for attacks to cause maximum casualties.
Security chiefs fear the fact the suspects were all young Britons marks the rise of an "enemy within".