The Westminster attacker was born in Britain and had previously been investigated for suspected extremism by MI5, Theresa May has confirmed.

The Prime Minister said the probe took place several years ago and that the unnamed suspect was not “part of the current intelligence picture”.

“The police have no reason to believe there are imminent further attacks on the public,” she told MPs gathered in a packed House of Commons.

“Some years ago, he was once investigated by MI5 in relation to concerns about violent extremism.

“He was a peripheral figure and the case is historic…there was no prior intelligence of his intent or the plot.”

The Prime Minister said the attacker was believed to be inspired by Islamist ideology but did not name any group.

Overnight raids in Birmingham and London have resulted in the arrest of eight people and intensive investigations continue as the police presence is stepped up nationwide.

Conservative MP Tobias Ellwood (centre) helps emergency services attend to a police officer outside the Palace of Westminster, London, after a policeman was stabbed (PA wire)

Mrs May said the atrocity, which left three victims dead, was an “attack on free people everywhere”.

“Yesterday an act of terrorism tried to silence our democracy, but today we meet as normal, as generations have done before us and as future generations will continue to do, to deliver a simple message: 'We are not afraid and our resolve will never waver in the face of terrorism',” the Prime Minister said.

She added that the terrorist had targeted a “place where people of all nationalities and cultures gather to celebrate what it means to be free” and taken out his rage on innocent men, women and children.

Aysha Frade was the second victim named following Wednesday’s attack, where PC Keith Palmer was stabbed to death outside the Houses of Parliament.

​She and another member of the public, a man in his 50s, died of injuries sustained on Westminster Bridge as an attacker sped his car along the pavement.

He crashed it into gates next to the Houses of Parliament before getting out and bursting through the entrance, stabbing PC Palmer before being shot dead at around 2.40pm.

In pictures: Westminster attack Show all 9 1 /9 In pictures: Westminster attack In pictures: Westminster attack An air ambulance lands after gunfire sounds were heard close to the Palace of Westminster in London PA wire In pictures: Westminster attack MPs wait until the situation is under control in Westminster. 'The alleged assailant was shot by armed police,' David Lidington, leader of the House of Commons, told the house. BBC News In pictures: Westminster attack Crowds gather in Westminster after shooting incident, which police are treating as terror attack BBC News In pictures: Westminster attack Police were also called to an incident on Westminster Bridge nearby AP In pictures: Westminster attack Early reports indicate the car, which mounted the pavement on Westminster Bridge and mowed into around a dozen people, was the same vehicle which then rammed into the railings of the Palace of Westminster, just around the corner Reuters In pictures: Westminster attack Security sources described the suspected assailant as a middle-aged Asian man, who is understood to have left the car before attacking a police officer with a seven-to-eight inch knife PA wire In pictures: Westminster attack Police have asked people to avoid the immediate area to allow emergency services to deal with the ongoing incident AP In pictures: Westminster attack One woman has died and a number of others, including the police officer, have been hurt, according to a junior doctor at St Thomas' Hospital Reuters In pictures: Westminster attack At least three gun shots were heard by those inside Westminster, and proceedings in the House of Commons have been suspended AP

Of the casualties admitted to hospital, 12 were British, three were French children, two Romanians, four South Koreans, two Greeks and one citizen each from Germany, Poland, Irish, China, Italy and the US.

Tobias Ellwood, the Foreign Office minister, was at the scene and attempted to save PC Palmer’s life.

Mrs May paid tribute to his “heroic efforts” and those by PC Palmer and all emergency services and parliamentary staff, with security at the Palace of Westminster under automatic review.

“Yesterday we saw the worst of humanity, but we will remember the best,” she added.

”The greatest response lies not in the words of politicians, but in the everyday actions of ordinary people.

“It is in these actions - millions of acts of normality - that we find the best response to terrorism.