The knifeman who strapped a fake bomb vest to his chest before stabbing two people in South London had been released from prison just days earlier.
London police officers shot and killed the suspect, Sudesh Amman, after he stabbed two people on Streatham High Road, on Sunday (local time).
The 19, was jailed in 2018 after admitting 13 terror offences and was described by police as "knife obsessed" and previously said he was "armed and ready" to carry out an attack.
Whitehall sources told The Telegraph's Charles Hymas: "He had been very recently released from prison. He had been in prison for a terrorist offence, possession and distribution of extremist material.
Sudesh Amman.
"He came out towards the end of January. He was under very strict licence terms. He was also under surveillance and that is what allowed the police to do their job so quickly. It meant that it could have been worse than it was had he not been under this surveillance.
"There were concerns about this individual when he was in prison - around things he was saying - but there were no powers available to any of the authorities to keep him behind bars.
"He had reached the automatic halfway point, halfway release point in his sentence and there was nothing that could be done to keep him locked behind bars."
The terrorist stockpiled a combat knife, air gun and black flag at his family home in London.
*UPDATED STATEMENT* on our response to this afternoon's incident in #Streatham.
We treated three patients for injuries at the scene, and took all three people to hospital. pic.twitter.com/oDCIO3sh6i
He sent beheadings videos to his girlfriend and advised her to kill her "kuffar" parents.
Amman told her: "If you can't make a bomb because family, friends or spies are watching or suspecting you, take a knife, molotov, sound bombs or a car at night and attack the tourists (crusaders), police and soldiers of taghut, or western embassies in every country you are in this planet."
Amman was also found with a bomb-making manual.
Alexis Boon, then head of the Metropolitan Police Counter Terrorism Command, said at the time of his conviction that Amman had a "fierce interest in violence and martyrdom".
He explained: "His fascination with dying in the name of terrorism was clear in a notepad we recovered from his home. Amman had scrawled his 'life goals' in the notepad and top of the list, above family activities, was dying a martyr and going to 'Jannah' - the afterlife.
"It's not clear how Amman became radicalised but it is apparent from his messages that it had been at least a year in development. Whatever the circumstances, this case is a reminder of the need to be vigilant to signs of radicalisation and report it."
The Metropolitan Police tweeted details of the incident on Sunday afternoon (local time), saying "The circumstances are being assessed; the incident has been declared as terrorist-related."
Witnesses reported hearing two gunshots just after 2 p.m. Social media showed multiple ambulances on the scene and helicopters in the air as helicopters responded to the incident.
The man was seen lying on the floor wearing what witnesses described as a possible suicide vest, with a knife nearby.
Police warned people to stay out of the area.
Gulled Bulhan, a 19-year-old student from Streatham, told Britain's Press Association that he witnessed the attack.
"I was crossing the road when I saw a man with a machete and silver canisters on his chest being chased by what I assume was an undercover police officer - as they were in civilian clothing,'' he said. "The man was then shot. I think I heard three gunshots but I can't quite remember.
Bulhan said he ran into a local library to seek safety.
"From the library, I saw a load of ambulances and armed police officers arrive on the scene," he said.
The Prime Minister has expressed his concern for those injured in the terror-related incident in south-east London.
British Prime Minister Boris Johnson tweeted: "Thank you to all emergency services responding to the incident in Streatham, which the police have now declared as terrorism-related."
