High-profile events offering potential mass casualties fit the remit of Manchester Arena or London Bridge-style lone wolf or organised group assaults.
Counter terrorism security advisor Neil Philip said there was no specific threat but stressed the nationwide alert remains severe, meaning a UK attack is highly likely.
“George Street is already crammed with people,” said Mr Philip. “Hogmanay with 80,000 people on Princes Street with the castle as a backdrop ticks all these boxes.”
The Edinburgh police advisor warned shopkeepers, hotel staff and taxi drivers at Usher Hall to be on their guard over Christmas and New Year during a routine security briefing.
“It takes a lot of planning,” said Mr Philip, of large-scale attacks. “If there’s a lot of people involved in the planning process, there’s a chance some of the information leaks out and the security services can disrupt and stop the attack.”
Evacuation drills and emergency procedures need to be practised otherwise they were “just ink on paper”, he added.
Mr Phillip warned attackers might appear “perfectly normal” and advised business owners and staff to trust their instincts on anything appearing abnormal or suspicious.
“We would rather know about any suspicious activity and investigate it than not know about it at all,” said Mr Phillip. “It might be part of a pattern of behaviour.”
But he also sought to reassure the audience.
“There is no known threat to Edinburgh as it stands – if there was, we would tell you,” he said.
In October, security services staged a three day drill at the Royal Bank of Scotland HQ at Gogar which simulated an attack being underway in the capital.
Armed police, tactical units, medics and other first responders simulated how they would respond in a live situation.
The high-level event included home secretary Amber Rudd chairing a Cobra meeting at Westminster and the Scottish government’s resilience room being activated.
Actors played the part of blood soaked terror victims including several ‘dead’ bodies, and others being stretchered away.
Among those taking part in the drills were Police Scotland, Northumbria Police, the Scottish Fire and Rescue Service, Scottish Ambulance Service, North East Ambulance Service, Transport Scotland, NHS Scotland and Ministry of Defence.
Councillor Donald Wilson, culture and communities convener at the City of Edinburgh Council, said: “Hogmanay is one of the busiest nights of the year in Edinburgh. Appropriate measures have of course been put in place this winter, as they are every year, to ensure the security of our popular winter festival destinations.”
A spokesperson for Underbelly, organisers of Edinburgh’s Christmas and Hogmanay, said: “The safety and security of staff and visitors to Edinburgh’s Christmas and Hogmanay is our number one priority.”