Image copyright AP Image caption The man had reportedly made threats against Mr Abbott

An 18-year-old man who had made threats against Australian Prime Minister Tony Abbott has been shot dead in Melbourne, reports say.

The man had been under surveillance as a "person of interest", and was being investigated over claims of terrorism, the ABC broadcaster said.

Two police officers were reportedly stabbed by the man before he was shot.

They have both been taken to hospital and one is reported to be in a critical but stable condition.

The incident happened when the man arrived at a police station in the Endeavour Hills suburb of Melbourne on Tuesday evening.

He had been asked to attend an interview there, ABC reports.

According to Sky News Australia, the man was brandishing a flag of the Islamic State (IS) militant group.

Image copyright EPA Image caption Security has been tightened across Australia recently, including outside parliament

Image copyright Reuters Image caption Australia has pledged that its fighter jets will play a part in US-led air strikes on Islamic State positions in Iraq

Image copyright New South Wales Police Image caption Last week's raids are being called Australia's biggest ever anti-terrorism operation

A police statement said that an Australian Federal Police officer and a Victoria state police officer - part of a joint counter-terrorism team - met the teenager outside the station. It was then that the violence erupted.

The Melbourne Age quoted onlookers as saying that the man had been shouting insults at Mr Abbott and the Australian government in general in the moments before he was shot.

Sources quoted by The Australian said that he was a "known extremist" who was intercepted by two teams of police. The paper said it is believed that he had recently had his passport cancelled.

The incident has occurred amid heightened tensions due to major counter-terrorism raids last week in Sydney and Brisbane.

The raids were aimed at disrupting alleged IS-linked plans to publicly behead a randomly-selected Australian.

Australian authorities believe at least 60 Australians are in the Middle East fighting with IS (also known as Isis or Isil) and other militant groups.