It's not a water canon, it#s an armored vehicle used/owned by protestors.
Obviously being "checked" by police. BBC reports 6 occupants being arrested. Not really clear on what charge if the vehicle is road legal....

Just heard on BBC news that it was given a full road check and found road worthy and permitted to continue into the city

So they must have been sat around doing fuck all.

11 were arrested, 1 has now been freed. Can't wait to read the writeup they'll do on it like all their other actions.

This armoured car was army green until recently, having been used at the DSEI arms fair 2007 and more recently the 'Free Hackney' Olympic handover. Considering how the Space Hijackers are original, jovial and generally not lawbreaking (and I think some of them are lawyers and barristers) I expect they weren't impersonating police so much as security or something else. Look at other photos from today and there are other protesters dressed a bit like police (but maybe they're dressed as parking attendants or similar). Its strange that the arrests happened some time after a police escort and several police inspections of the vehicle. Usually the police bug the Space Hijacker's phones especially when the armoured car is involved.

The Space Hijackers can be found at
 http://www.spacehijackers.co.uk
 http://twitter.com/spacehijackers