While nanotechnology is not explicitly mentioned, it looks like the thin end of an anonymous wedge to curb research into any technology that the UK Government sees as being destabilising.
A list of "sensitive" technologoes is to be maintained, and students using them will have to be licenced by the government. Academics are livid. It is draconian stuff indeed, being one of those dreadful forms of legislation which prohibit a wide range of commonplace acts but are only enacted when the Government or police feel like it.
Update: More coverage on this issue appeared in the New Scientist (18 February 2002).