Fears of increasing racial tension are running high in London after a van was deliberately driven into a group of Muslim worshippers last night.

A 48-year-old man was arrested after the incident, which is being treated as a terror attack.

Witnesses said the white van drove at high speed down Seven Sisters Rd in Finsbury Park, which has a large Muslim population, shortly after the end of Ramadan evening prayers, known as taraweeh.

It then mounted the pavement and ploughed into a group of people who were giving first aid to an elderly man who had fallen ill, outside the Muslim Welfare House, near Finsbury Park Mosque.

The driver, a clean-shaven white man with curly hair, reportedly screamed, "I want to kill all Muslims" before bystanders wrestled him to the ground and started kicking him. Some said he cried, "Kill me, kill me" and was laughing as he lay on the ground.

But an Imam urged the crowd not to hurt the man, according to the Daily Mail, and the crowd held him down until police arrived at around 12.20am.

One person - later confirmed to be the elderly man - died at the scene. A further eight people were being treated across three London hospitals and two victims suffered minor injuries, the London Ambulance Service said.

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It was too early to state if the man's death was the result of the attack, deputy assistant commission Neil Basu said last night.

The attack was being treated as terrorism, he confirmed.

"This was an attack on London and all Londoners and we should all stand together against extremists whatever their cause."

The suspect was taken to hospital as a precautionary measure and would be undergoing a mental health assessment.

Aucklander Chris Norris told 1 News he was just 100m from the mosque when he heard a "horrific bang". He described people lying on the ground "like a war scene" and said he saw two men get out of the van and run down the road.

He and about 20 other men lifted the van off the leg of one trapped victim, Norris said.

Despite multiple reports that two or three men emerged from the van, Met Police said they were not seeking anyone else in connection with the attack.

Harun Khan, Secretary General of the Muslim Council of Britain, condemned the attack and blamed it on a "hugely worrying" trend of Islamophobia.

"Given we are approaching the end of the month of Ramadan and the celebration of Eid with many Muslims going to local mosques, we expect the authorities to increase security outside mosques as a matter of urgency."

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Police stand guard at a cordon on a road near Finsbury Park station after a vehicle struck pedestrians in north London. Photo / AP
Police stand guard at a cordon on a road near Finsbury Park station after a vehicle struck pedestrians in north London. Photo / AP

Statistics released earlier this month showed a five-fold increase in hate crimes against Muslims following the London bridge attacks, in which eight people died after a van was driven into pedestrians and armed men attacked people with knives on June 3.

Mayor Sadiq Khan called the latest incident "a horrific terrorist attack on innocent people" and said extra police would be deployed to "reassure communities, especially those observing Ramadan".

The Muslim Welfare House called for calm after the incident.

"We have worked very hard over decades to build a peaceful and tolerant community here in Finsbury Park and we totally condemn any act of hate that tries to drive our wonderful community apart," the statement said.

The Church of England offered its solidarity and prayers for all those affected.

Prime Minister Theresa May was last night holding a special cabinet security Cobra meeting, the third in less than a month after the Manchester bombing on May 22 and the London Bridge attacks.