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Terror Suspect Shot Dead After Stabbing Rampage Named

Sudesh Amman was released from prison just days before he allegedly stabbed multiple people in what police say was a terrorism-related incident in south London.

The 20 year old had been under police surveillance at the time of the attack and was previously jailed for distributing extremist material, police confirmed on Monday.

He'd served just half of a three years and four months sentence at the Old Bailey before he was freed in January.

"The suspect has not yet been formally identified however, given the circumstance of the incident, we are confident that he was Sudesh Amman, aged 20," Deputy Assistant Comissioner Lucy D'Orsi told reporters on Monday.

Amman was shot dead by police after they saw what was later identified as a hoax explosives device strapped to his body.

The man was arrested in 2018 after the then-teenager sent extremist content to his younger siblings and exclaimed "the Islamic State is here to stay", according to reporting by the BBC.

Police on the scene in London. Image: AAP

He also posted photos showing an image of a knife and two fire arms on a Shahada flag along with Arabic words meaning: 'Armed and ready April 3'.

In messages with one family member, Amman said it was permissible to rape Yazidi women as they are slaves, the BBC reported.

Amman allegedly encouraged his girlfriend to kill her parents and sent her beheading videos, as well as claiming he wanted to carry out acid attacks.

Prime Minister Boris Johnson said the government would announce further plans for "fundamental changes to the system for dealing with those convicted of terrorism offences" on Monday.

BB gun found in the home of Sudesh Amman, who was sentenced to three years and four months at the Old Bailey in December 2018. Image: AAP

"If you are convicted of a serious terrorist offence, there should be a mandatory minimum sentence of 14 years - and some should never be released," Johnson said.

"Further, for all terrorism and extremist offences, the sentence announced by the judge must be the time actually served - these criminals must serve every day of their sentence, with no exceptions."

Police received reports of the stabbings about 2pm local time on Sunday.

The man allegedly entered a shop in Streatham in London's south west before launching his stabbing attack.

A man in his 40s is now in a stable condition after initially suffering life-threatening injuries.

A woman in her 50s has been discharged from hospital and another woman in her 20s has minor injuries caused by glass after the discharge of a police firearm, London's Metropolitan Police said.

"We would like to thank the numerous members of the public who assisted officers and ambulance staff this afternoon following what was a very difficult incident. I am also extremely proud of the bravery of our armed officers," D'Orsi said.

Witness Karker Tahir told Sky News undercover police officers chased a man down the neighbourhood's main commercial street.

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"They kept telling him 'stop, stop'," Tahir said.

"But he didn't stop, and then I saw that they shot him three times. It was horrible seeing it. The man was on the floor and it looked like he had something which police said may be a device."

"Police came to us and said 'you have to leave the shop because he has a bomb in his bag'," Tahir added.

Street pastor Richard Mustonen-Smith, 59, said he was in shock.

"I've been here all my life," he said. "We're always getting accidents down here, but not this."

The attack took place a little over two months after two people were stabbed to death near London Bridge by a man who had recently been released from prison.

Image: Reuters

Streatham MP Bell Reberio-Addy said police have assured her Sunday's attack was an "isolated incident".

British Prime Minister Boris Johnson praised emergency workers, while London Mayor Sadiq Khan urged community resolve in the face of another attack.

"Terrorists seek to divide us and to destroy our way of life," he said.

"Here in London we will never let them succeed."

Police said they were "confident that this is an isolated incident which has been contained".

Officers from the Met's Counter Terrorism Command are now leading an investigation into the incident.

With AAP.