Re: apostrophe in cities
Welcome to Using English.
1. Probably the best choice It's okay to use a noun as a modifier this way.
Originally Posted by Nutella
2. Incorrect. "Tales'" is not possessive, and it's a common mistake to try to use an apostrophe to make something plural, but it's a mistake.
3. Okay if you want to focus on stories that "belong" (are associated with) London. But as I said for 1, you can use "London" to describe which tales without using the apostrophe.
I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.