Khuram Butt, 27, was claiming Jobseeker's Allowance of around £300 a month, and was also paid housing benefit for his council-owned flat in Barking as well as child benefit

The ringleader of the London terror attack was bankrolled by the taxpayer, it has been revealed.

Khuram Butt, 27, was claiming Jobseeker's Allowance of around £300 a month, and was also paid housing benefit for his council-owned flat in Barking as well as child benefit.

Father-of-two Butt was a supporter of al-Muhajiroun and an associate of its leader Anjem Choudary, who encouraged his followers to exploit Britain's welfare system.

The jailed hate preacher even used the phrase 'Jihad Seeker's Allowance'.

Butt, who wore an Arsenal shirt on the night of the attack, started claiming benefits after being sacked from his job on the London Underground last October.

He worked there as a trainee customer services assistant for nearly six months but was fired for poor timekeeping.

He also received Jobseeker's Allowance for over a year after leaving a job at KFC and prior to working for Transport for London, the Daily Telegraph reported.

Relatives of Butt said he drew inspiration from extremist videos on YouTube and wanted to fight in Syria but had his passport taken away by family.

Fahad Khan, 36, the cousin of Butt's wife Zahrah Rehman, claimed his younger relative watched the hateful tirades of preachers online and supported ISIS.

Butt is suspected of running mixed martial arts classes at the Ummah Fitness Centre, in Barking, in an attempt to groom teenagers for terror.

The gym was raided by police on Tuesday after CCTV revealed the three London Bridge terrorists met there days before the attack.

It shows Butt meeting Rachid Redouane, 30, and Youssef Zaghba, 22, five days before they murdered eight people and left dozens injured.

Counter-terrorist police are building a detailed picture of the activities of the three men before Saturday night's massacre.

Butt lies on the floor in Borough Market after being shot by armed police while wearing what turned out to be a hoax suicide vest

The bodies of the two other men, Redouane, right, and Zaghba, left, lie in the road in Borough Market after being gunned down

The aftermath: Debris from Saturday's attack in Borough Market, London, remained in the street on Wednesday

They are examining their movements and communications, as well as a mass of forensic evidence, to see whether they had help.

Sixteen suspects have been arrested, including three men held during raids in the early hours of yesterday.

One 29-year-old suspect was dragged from a house in Ilford by armed police and two others, aged 33 and 27, were arrested in the street in a dramatic ambush. Two are being held under terrorism laws and the other on suspicion of drugs and firearms offences.

Ilford and nearby Barking, where 12 were arrested on Sunday, have become the focus of the police inquiry. Neighbours said police spent more than an hour at the gym, which is in a small parade of shops.

They were seen leaving with computer equipment and specialists searched under parked vehicles.