Prime Minister Boris Johnson has said "we must act" to avoid another lockdown as virus cases rise in England.
He set out a new "rule of six", restricting gatherings to a maximum of six people, enforced by police able to issue fines or make arrests.
Mr Johnson also outlined a "moonshot" plan to control the virus with mass testing, possibly by next spring.
It comes as the UK reported another 2,659 coronavirus cases, the fourth day running of over 2,000 reported cases.
"I want to be absolutely clear, these measures are not another national lockdown. The whole point of them is to avoid a second national lockdown," Mr Johnson said in the first Downing Street coronavirus briefing since July.
He added "it breaks my heart to have to insist on these restrictions".
In the last week, cases have risen from 12.5 infections per 100,000 people to 19.7 per 100,000 across the UK.
Coronavirus was more prevalent among young people, with 54 cases per 100,000 people in the 19 to 21-year-old age group.
Mr Johnson also announced that:
- Venues such as pubs and restaurants will be legally required to request contact details of everyone visiting, hold it for 21 days and provide it to NHS Test and Trace. They face fines of £1,000 if they fail to comply
- Business opening hours could be restricted across the whole nation if cases continue to rise. But initially the measure will be limited to local lockdown areas such as Bolton, where venues must close between 22:00 and 05:00
- "Covid-secure marshals" will be introduced to help ensure social distancing in town and city centres
- The passenger locator form, filled out by travellers arriving in the UK to enforce quarantine rules, will be simplified and Border Force will increase enforcement
- Plans to try out larger audiences in venues later this month will be revised, and the government is reviewing its plan to allow spectators back into sports stadiums from 1 October
Mr Johnson said the rules had "become quite complicated and confusing" and the government was "simplifying and strengthening" them after feedback from police and the public.
But Labour leader Sir Keir Starmer said the new rules on gatherings were a reflection that "poor communications were a large part of the problem" with the spread of the virus.
Sir Keir said the government also needed to improve testing, which was "all over the place", following reports that some people have been unable to book tests.
The prime minister said the government was "working hard" to increase testing capacity to 500,000 tests a day by the end of October, but urged people only to book a test if they had coronavirus symptoms.
He said they also want to use new types of test "in the near future" to identify people who do not have coronavirus and are not infectious so they can live life "in a more normal way".
He said these swab or saliva tests could be turned around in 90 or even 20 minutes, with millions processed each day.
However, BBC health correspondent Nick Triggle said such tests were still at the piloting stage, and so were unlikely to be manufactured or distributed before the end of the year.
Discussing the plans, the prime minister evoked the Apollo space programme, describing the "giant collaborative effort" of this testing programme as a "moonshot", which could restore a more normal way of life even if a vaccine or treatment is not available.
A report in the BMJ said the UK has drawn up plans to carry out up to 10 million Covid-19 tests a day by early next year, at a cost of more than £100bn.
But Dr Chaand Nagpaul, council chairman of the BMA, said it was unclear how the "moonshot" testing would work given the "huge problems" currently seen with lab capacity.
The Department of Health declined to comment directly on the report, but said it wanted to boost the number of tests with a rapid turnaround time.
'Behind the scenes, focus is on the vulnerable'
For all the talk of vaccines and rapid testing, it was clear - certainly listening to UK chief medical adviser Prof Chris Whitty - that this winter will be hard.
Respiratory viruses tend to do better in the autumn and winter because of the colder weather and the fact people mix indoors more. That is why we see flu cases and, sadly, deaths rise every winter.
Many experts believe the same will happen in the coming months, despite the latest measures.
That means the government faces some very difficult decisions. It has to balance the impact of further restrictions - which can harm health in other ways, as well as damage education and the economy - against the risk of letting the virus spread.
The public has a huge role to play. But on its own that may not be enough.
Behind the scenes there is lots of focus on how to protect the vulnerable - that could mean locking down care homes and asking people to shield again.
But the UK is in a stronger position than it was at the start of the pandemic. The lockdown bought us time.
Better treatments are available and, while many problems remain with testing and tracing, the systems in place are an advance on where we were when the virus first hit the UK.
These new tests will be piloted with audiences attending indoor and outdoor venues in Salford from next month.
But the government's chief scientific adviser Sir Patrick Vallance said the technology needed to be "tested carefully" and it would be "completely wrong to assume this is a slam dunk".
The measures that needed to be taken against coronavirus were "damaging" socially, economically and to people with other health conditions, chief medical officer Prof Chris Whitty acknowledged.
"We have to do them because the alternative is worse," he said.
He added that "the period between now and spring is going to be difficult" and people shouldn't see the restrictions "as a very short term thing" because they were unlikely to be lifted after just two or three weeks.
Mr Johnson said it was "too early to say" if big parties could be held over Christmas, but added that he was "still hopeful" some aspects of life could return to normal by the festive season.
He said the restrictions would be in place only "as long as necessary".
"I'm sorry about that. I wish we did not have to take this step, but as your prime minister I must do what is necessary to stop the spread of the virus and save lives," he said.
The new "rule of six" means:
- Social gatherings of more than six people in England will not be allowed in law from Monday 14 September
- The new rule applies to people in private homes, indoors and outdoors, and places such as pubs, restaurants, cafes and public outdoor spaces
- It applies to all ages
- The rule does not apply to schools and workplaces, to people living together or in the same support bubble, or to weddings, funerals and organised team sports
- The full list of exemptions also includes protests and political activities subject to "strict risk assessments", jury service and providing emergency assistance
- People who ignore the police could be fined £100 - doubling with each offence to a maximum of £3,200
The chairman of the Metropolitan Police Federation, Ken Marsh, said the new rules were " very flimsy" and would be difficult to enforce.
At present, the guidance says two households of any size are allowed to meet indoors or outdoors, or up to six people from different households outdoors. Until now the police have had no powers to stop gatherings unless they exceeded 30.
The number of people allowed to meet inside or outside varies in the UK's four nations. If you are meeting indoors: up to eight people from three different households can meet in Scotland; up to six people from two households in Northern Ireland; up to four households can form an "extended household" in Wales.
In other developments:
- The boss of Heathrow Airport is urging the government to fast-track a Covid-19 test which gives results in 20 seconds and is about to go into clinical trials to be certified for medical use
- Businesses in England that are required to close because of coronavirus restrictions will be able to claim £1,500 per property every three weeks, the Treasury announced. But the British Chambers of Commerce said for most "this will not be enough to offset the resulting cash crunch"
- Doncaster Racecourse has been told by public health officials to stop spectators attending its meeting from Thursday. More than 2,500 spectators are expected there on Wednesday
- The quarantine rule on travellers coming into England from seven Greek islands came into force at 04:00 on Wednesday
- The first clinical trials for a coronavirus vaccine at Oxford University have been put on hold after a participant had an adverse reaction