British authorities have warned a new terror attack may be "imminent", after identifying the suspected suicide bomber who killed 22 people, including children, in an attack on a crowded pop concert in Manchester.

Key points: Authorities are investigating whether Salman Abedi acted alone or had help

Authorities are investigating whether Salman Abedi acted alone or had help British PM says attack displayed "appalling sickening cowardice"

British PM says attack displayed "appalling sickening cowardice" Troops to be deployed to streets amid fears of another attack

The man suspected of carrying out Britain's deadliest bombing in nearly 12 years was named as Salman Abedi, aged 22, a student at the University of Salford, near Manchester city centre.

This morning British Prime Minister Theresa May said there was a possibility Abedi was part of a wider network and said the country's terror alert level was being upgraded to "critical".

She said soldiers would be put on the streets of British cities to help police standing guard over possible targets.

She said the soldiers would be under the command of police.

Ms May said Abedi was born in Britain. US security sources, citing British intelligence officials, said he was born in Manchester in 1994 to parents of Libyan origin.

Sorry, this video has expired 'Armed military personnel' to support UK police, May announces

Abedi is believed to have travelled by train from London to Manchester before the attack, they said.

"Our priority, along with the police counterterrorism network and our security partners, is to continue to establish whether he was acting alone or working as part of a wider network," Manchester Police chief constable Ian Hopkins said.

Earlier, police arrested a 23-year-old man and carried out raids throughout Greater Manchester including one at a Manchester address which was reportedly Abedi's home.

Police sealed off an entrance to dozens of terraced houses in the suburb of Fallowfield, about five kilometres south of the city centre, and carried out a controlled explosion to break down the door.

The attacker set off his improvised bomb about 10:30pm on Monday (local time) as crowds streamed out of the Manchester Arena after a pop concert by Ariana Grande, a US singer especially popular with teenage girls.

Abedi was killed in the bombing.

"All acts of terrorism are cowardly," Ms May said outside her Downing Street office after a meeting with security and intelligence chiefs.

"But this attack stands out for its appalling sickening cowardice, deliberately targeting innocent, defenceless children and young people who should have been enjoying one of the most memorable nights of their lives.

Sorry, this video has expired Mourners pay respects in Manchester

The Islamic State group, now being driven from territories in Syria and Iraq by Western-backed armed forces, claimed responsibility for what it called a revenge attack against "Crusaders", but there appeared to be contradictions in its account of the operation.

Witnesses related the horror of the blast, which unleashed a stampede just as the concert ended at Europe's largest indoor arena, full to its capacity of 21,000.

A photo of Saffie Rose Roussos, 8, posted by her father to Facebook with an appeal to find her. Saffie was later confirmed to be among the dead. ( Facebook )

Eight-year-old Saffie Rose Roussos and student Georgina Callander were the first victims from the attack to be named, and a number of people remained "very seriously" wounded and more than a dozen children were hospitalised after the attack, health officials said.

The attack was the deadliest in the UK since four British Muslims killed 52 people in suicide bombings on London's transport system in 2005.

On Tuesday evening (local time) thousands of people attended a vigil for the dead in central Manchester.

Sorry, this video has expired Manchester bishop leads vigil for attack victims

Concert attack 'particularly wanton and depraved'

Ms May said security services were working to see if a wider group was involved in the attack, which fell less than three weeks before a national election.

Campaigning was suspended as a mark of respect.

Ms May spoke to US President Donald Trump, French President Emmanuel Macron and several other foreign leaders on Tuesday about the attack, her spokesman said — she also visited the police headquarters and a children's hospital in Manchester.

The White House said Mr Trump had agreed with Ms May during their telephone conversation that the attack was "particularly wanton and depraved".

Queen Elizabeth held a minute's silence at a garden party at Buckingham Palace in London.

"The whole nation has been shocked by the death and injury in Manchester last night of so many people, adults and children, who had just been enjoying a concert," she said in a statement.

Sorry, this video has expired Concertgoers panic as loud bang heard in Manchester Arena

Reuters/ABC