Police in London say they have shot dead three men who killed at least seven people in a vehicle and knife attack on Saturday night revellers on and around London Bridge.

Key points: Van drove into pedestrians on London Bridge, people stabbed at nearby Borough Market

Van drove into pedestrians on London Bridge, people stabbed at nearby Borough Market More than 48 people were taken to hospital

More than 48 people were taken to hospital Attack being treated as "terrorist incident" by police

A van ploughed into pedestrians on London Bridge just after 10:00pm (local time) and continued to the nearby Borough Market, where the three men got out and started stabbing people in bars and restaurants.

Police said the three perpetrators were shot dead within eight minutes of the start of the attack.

At least seven people were killed in the attack. More than 48 people were taken to hospital, the ambulance service said.

London's Mayor Sadiq Khan said some of those being treated in hospital were in a critical condition.

Several witnesses in the area earlier reported seeing victims with their throats cut.

London's Metropolitan Police declared they were investigating "terrorist incidents". Mr Khan described it as a "deliberate and cowardly attack".

"Over the course of today and the next few days, in terms of London, you will see be seeing an increasing police presence — some armed officers, some plain clothes — to keep us safe," Mr Khan said.

It comes just days ahead of a general election and less than two weeks after a suicide bomber killed 22 people after a concert in Manchester.

In March four people were killed in an attack on Westminster Bridge, when a speeding car ran down pedestrians before the driver got out and fatally stabbed a police officer.

'Explosive vests' were fake, police say

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Metropolitan Police Assistant Commissioner Mark Rowley said the force's Counter Terrorism Command had launched a full investigation into the London Bridge attack.

A photo posted on social media showed what appeared to be a man lying on the ground with a canister strapped to his body and police officers standing over him. Another man lay on the ground in the background.

Police said while the suspects were wearing what looked like explosive vests, these were later established to be fake.

Video showed police officers storming into a Borough Market bar and screaming at diners to get on the ground, and people in a pub taking cover as gunshots rang out in the street outside.

Members of the public were led away with their hands on their heads, and people were being treated as they lay bleeding on the ground.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 46 seconds 46 s Police storm bar forcing patrons to the ground after London attack

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 12 seconds 1 m 12 s 'They are dead': London police confirm three people shot by police following attacks

Man helped woman lying 'in a puddle of blood'

Brian, a witness who spoke to the ABC at London Bridge, said he left a bar in the area after the Champions League final and heard a lot of screaming.

"We started seeing people on the [ground]. We saw a crashed van," he said.

Sorry, this video has expired Witnesses from Borough Market describe 'screaming and running' as London attacks took place

"I know there was more than 10 bodies on the [ground]. If I had been there 30 seconds before, I probably would have been in the middle of it."

Brian said as soon as he got to the scene, he helped a woman on the ground while a man continued attacking other people.

"The woman that I mostly helped, she just went very pale. She was in a puddle of blood," he said.

Brian said as he was helping the woman, a man was attacking people in nearby bars and the restaurants.

"I didn't see the attacker … all I saw was the police or dead bodies on the floor," he said.

A different eyewitness, Gerard, told the BBC he was caught up in the commotion while at a Borough Market pub.

"When I first saw them they went 'this is for Allah' and stabbed this girl, I don't know how many times — 10 times, maybe 15 times — and she was going 'help, help me!' and I could not do nothing," he said.

"I tried to help her, I threw something at them … to frighten them, to get them away from her."

Sorry, this video has expired Witnesses said a van ploughed into pedestrians on London Bridge.

'At least three' victims had their throats cut

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 32 seconds 32 s Gunshots heard as people take shelter in a restaurant

There were multiple witness reports of throats being cut.

A witness who was on London Bridge after the attack told Reuters that she saw at least three people who appeared to have their throats cut.

A different witness in the Borough Market area told CNN that two men entered a restaurant and stabbed two people inside. They said a waitress was stabbed in the throat and a man was stabbed in the back

Three major hospitals located within two kilometres of London Bridge said they were on lockdown after the attacks.

"Due to the ongoing incident in central London, Guy's, St Thomas' and [Evelina London Children's Hospital] are on lockdown to keep patients, relatives and staff safe," the authority that runs the hospitals said on Twitter.

The incident happened in a busy part of London on a Saturday night. ( AP: Dominic Lipinski )

Two Australians caught up in attack: Turnbull

Emergency personnel tend to wounded on London Bridge after an incident in central London. ( AP: Dominic Lipinski )

Prime Minister Malcolm Turnbull said the Federal Government was aware of reports of two Australians who had been affected by the attack.

"One case has been confirmed and the Australian concerned is in hospital. In the other case, we are continuing to make inquiries," Mr Turnbull said.

"Our officials will continue to provide every assistance they can to Australians affected by this shocking attack and their families."

The attack was being treated as a potential act of terrorism, British Prime Minister Theresa May said. ( Reuters: Hannah McKay )

One of the two Australians, Candice Hedge, called her friends and family in Queensland on Sunday evening (AEST) to let them know she was OK.

Ms Hedge, who moved to London a year ago, was injured in the attack.

One of her former work colleagues told the ABC Ms Hedge had called him from London's St Thomas Hospital to say she had been stabbed once in the throat, but her injuries were not life threatening.

She said she had received stitches and was recovering well.

Analysis: The biggest challenge So, yet again, murder, mayhem, fear. For the third time in three months the UK has been hit by terrorism. The problem for the security services in Britain is they have too many "people of interest" to properly track them all. And with the military pressure on Islamic State fighters in Iraq and Syria, increasing numbers of battle hardened fighters will opt to come home. The message from IS is clear: attack your own society, your own neighbours, young girls at a concert, pedestrians, people out for a drink on a summer's night — hurt the nation in which you grew up. How do you stop individuals and small groups of people listening to the vile advice from IS and its subsidiaries but not necessarily in direct contact with them? The message to kill is easily accessible through social media and if there is no obvious phone email or social media trail that the security services can tap into, you are left with twisted minds in possession of deadly weapons: a vehicle and knives. All that remains is the choice of target and timing and, unless authorities get lucky, another horror is added to the growing list. Stopping would-be terrorists before they strike is hard enough. But the far bigger challenge is defeating the ideologies that feed the violence. Until sound and effective means to counter the message are found, tragically more innocent people will die in cities and towns of Britain, and around the world. — Analysis by chief foreign correspondent Philip Williams

Prime Minister Theresa May was due to chair a meeting of the COBRA security committee later on Sunday (local time).

A spokesman for Ms May said her Conservative Party was suspending campaigning for Thursday's election in the wake of the attack.

Opposition Leader Jeremy Corbyn later announced the Labour Party would also be suspending its national campaigning.

"We are all shocked and horrified by the brutal attacks in London. My thoughts are with the families and friends of those who have died and the many who have been injured," Mr Corbyn said in a statement.

US President Donald Trump took to Twitter as events unfolded, offering help to Britain and promoting his travel ban as an extra level of security for Americans.

Back in Australia, senator Pauline Hanson also took to social media in the immediate aftermath of the attack to say "stop Islamic immigration before it is too late".

Opposition Leader Bill Shorten said it was "disgusting" that Senator Hanson was trying to stoke a debate about immigration "within hours" of the attack.

The Manchester bombing on May 22 was the deadliest attack in Britain since July 2005, when four British Muslim suicide bombers killed 52 people in coordinated attacks on London's transport network.

Witnesses said a van mounted the footpath and hit a number of people. ( Twitter: Brad Myers )

Map Where the London incidents occurred

ABC/wires