A terrorist was shot dead by police after stabbing two people in what is believed to have been an Islamist-inspired attack in south London.

Sudesh Amman was wearing a fake bomb vest when he attacked people on a busy street in the south London area of Streatham on Sunday afternoon.

A woman in a Streatham cafe asked a police officer to

The attacker

Amman, 20, from Harrow, north London, had been released from prison just days earlier after serving time for spreading extremist material.

He had been sentenced in December 2018 to three years and four months in jail after a court heard that he had shared his extremist views with those close to him, even encouraging his girlfriend to murder her parents.

Amman was under police surveillance at the time of the attack.

In the early hours of Monday, police said they were searching properties in Bishop's Stortford and south London but no arrests had been made.

Image: Plain-clothes officers approached the man with weapons drawn

The victims

Two people were stabbed - a man in his 40s and a woman in her 50s.

The man was taken to hospital in a life-threatening state, but his condition has since improved.

The woman was discharged from hospital on Sunday night.

A woman in her 20s was treated for minor injuries believed to have been caused by glass following police gunshots.

Where and when did the attack unfold?

The attack took place on Streatham's busy High Road - around seven miles from central London - at about 2pm.

Police back off after approaching attacker

Video shows two officers with guns drawn approaching the body outside Boots, before another plain-clothes officer on a high-powered motorbike pulls up.

They back off as the man on the ground lifts his head slightly and more armed officers arrive.

A 19-year-old student - who wanted to remain anonymous - said: "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.

"The man was then shot. I think I heard three gun shots but I can't quite remember."

Image: Police pushed people back from the scene. Pic: Dave Chawner

Another witness, Karker Tahir, told Sky News: "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."

Prime Minister Boris Johnson's response

"My thoughts are with the injured victims and their loved ones following today's horrific attack in Streatham.

"I want to pay tribute to the speed and bravery of the police who responded and confronted the attacker - preventing further injuries and violence - and all of the emergency services who came to the aid of others.

"An investigation is taking place at pace to establish the full facts of what happened, and the government will provide all necessary support to the police and security services as this work goes on."

'Armed police shot suspect dead at scene'

He also promised to announce "further plans for fundamental changes to the system for dealing with those convicted of terrorism offences" later today.

What does this mean for the national terror threat level?

In November, the national terror threat level was lowered to "substantial", meaning an attack is considered likely. That is the third-highest in a five-step system and marked the first time since August 2014 that the threat level had been so low.

It was lowered because of the belief that the threat of British jihadis returning to the country from Syria had been reduced by events there, including the Islamic State group's loss of territory.

It is not clear whether the Sunday's attack will lead to an adjustment of the threat level.