I actually am a police officer, so here's my point of view.
I don't mind people taking pictures of me. After all, I am in public. I would prefer that people ask me before starting to take the photograph, but que sera sera.
It is not illegal to take photographs of police officers going about their daily duties.
It is not illegal to take photos of anybody in public. Anything in the public domain is, by it's very nature, in the public domain. Clearly if a building states "no photography" then you can't take pictures in there.
The line gets a bit fuzzier if you are taking photos in "sensitive" areas - for example, I recently had a member of the public ask if he could take a picture of our station - of course ! There is nothing sensitive about the outside of a police station after all. However, had he wanted to take a picture of our parade room, which is covered with pictures of known offenders, the answer would have been very different.
I would be very surprised if any photographer was arrested under the Prevention of Terrorism Act if they were simply taking a few snaps of officers going about their daily business. Without going into great tracts of law, most UK officers are extremely reluctant to use this legislation as the use of it entails a vast amount of paperwork.
So, use common sense and courtesy, and if an officer says "don't take my photo", please remember that they just might not like having their photo taken, not that they are being an arse for the sake of it.