The stabbing attack near London Bridge was a terror attack, police have confirmed.

A suspect was shot by armed officers on Friday afternoon after "a number of people" were stabbed.

"I am now in a position to confirm that it has been declared a terrorist incident," said Assistant Commissioner Neil Basu, the head of UK counterterror policing.

“Officers from the Met’s Counter Terrorism Command are now leading this investigation. I must stress, however, that we retain an open mind as to any motive. It would not be appropriate to speculate further at this time."

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Police had been called shortly before 2pm to reports of a stabbing near the north side of London Bridge, which is in the City of London.

The suspect, who was initially restrained by members of the public, was shot by armed police and died at the scene.

Like the 2017 London Bridge attackers, he had been wearing a fake suicide vest.

The London Ambulance Service declared a major incident at the scene.

The incident came weeks after the UK terror threat was downgraded from severe to substantial, meaning further attacks are likely.

Footage filmed from a bus on London Bridge showed several members of the public struggling with the man on the floor.

“He has a knife,” one passenger said as armed police approached.

Officers could be heard shouting to the crowd as people started moving back.

One member of the public backed away holding a large knife, seconds before a police officer dragged a man attempting to restrain the suspect off him. A moment later, the suspect was shot.

A woman could be heard crying on the bus as people shouted “what the f***”.

Police have closed down a large area on both sides of London Bridge, with people either evacuated or told to stay inside offices, cafes and homes in the area.

( AP )

Boris Johnson returned to Downing Street from campaigning in his constituency ahead of next month's general election.

The prime minister said he was being kept updated on developments, adding: “I want to thank the police and all emergency services for their immediate response.“

Priti Patel, the home secretary, said she was "very concerned".

“My thoughts are with all affected,” she added. “I am grateful for the rapid response of our police and I urge everyone to follow their advice.”

Jeremy Corbyn said: “Shocking reports from London Bridge. My thoughts are with those caught up in the incident. Thank you to the police and emergency services who are responding.”

Sadiq Khan, the mayor of London, said his heart went out to everyone injured and affected by the attack.

He thanked emergency services, adding: “Every day they put their lives on the line for us - running towards danger in order to keep London safe.

"We must - and we will - stay resolute in our determination to stand strong and united in the face of terror. Those who seek to attack us and divide us will never succeed."

The incident happened metres away from the 2017 London Bridge attack.

That saw three Isis supporters plough a hired van into pedestrians on the bridge, before going on a stabbing rampage in nearby Borough Market.

They killed eight victims before being shot dead by armed police.

The attack, which was the third Islamist atrocity to hit the UK in 2017, caused barriers to be put up on London Bridge and other major crossings over the Thames.

A coroner's report into preventing future deaths warned that others could die unless authorities made changes.

After presiding over inquests into the deaths of the victims and perpetrators, Mark Lucraft QC, the chief coroner of England and Wales, called for MI5, counterterror police, the government and other authorities to take “action to prevent future deaths”.

He raised concern about the way potential lone terrorists are assessed by the security services, and was critical of the failure to install barriers on London Bridge before the attack.

The head of UK counterterror policing said the UK's terror threat level was reduced earlier this month because of a “positive developments in reducing the threat from terrorism”.