Caterpillar

Description:

Oh dear! I found this caterpillar and it's mates munching away this morning on a young tree recently planted by my landlady in the garden. Don't want to brin it to her attention so will wait until later to ask what kind of tree it is. This caterpillar appears to have a globule of water? on it's head. Perhaps someone could enlighten me please as to what this is.