Police investigating the ringleader of the London Bridge attack did not know that he was reported to a terror hotline and appeared in a documentary on jihadis, an inquest has heard.

The senior counterterror officer who was charged with investigating Khuram Butt for two years before the atrocity in 2017 admitted a “failing” in how a warning from his brother-in-law was handled.

Butt was known to be a member of Anjem Choudary’s al-Muhajiroun (ALM) network of Islamists and the subject of a joint MI5 and police operation.

He was being watched for potential attack planning when a fresh alert came in on 30 September 2015.

The Old Bailey heard that Usman Darr, the brother of Butt’s wife, called the national terror hotline to report “radical changes in his personality”.

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Mr Darr said the would-be terrorist was distributing jihadi texts, links to websites and “becoming increasingly extreme in his views”.

But the Metropolitan Police officer who headed the police investigation, who can only be named as Witness M because of an anonymity order, said his team was not told of the call.

The officer said the information went to another team investigating ALM, who focused on another extremist mentioned in the same call.

“It did not come to me, nor did not come to anyone in my team, and that was a failing,” witness M told the inquest on Tuesday. “I think the assessment was wrong.”

Jonathan Hough QC, counsel to the inquest, asked the officer: “Would you accept that where you have the situation of a family member calling to express concerns about somebody who happens to be under investigation, it’s very unsatisfactory that the investigation team doesn’t hear of that report?”

Witness M replied: “In short, yes. It denied us the option of discussing that information with MI5 and how it fitted into the bigger picture, and the option of what action to take.”

In the same month Butt was assessed by the security service as a “strong risk” of staging a terror attack on his own, but there was no evidence of active attack planning, the Old Bailey heard.

He was found to be “aspirational” in wanting to stage an attack but not having the ability to do so.

Witness M said he was unaware that Butt appeared in a Channel 4 documentary, called The Jihadis Next Door, which was broadcast in January 2016.

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It showed the would-be terrorist with other ALM members in Regent’s Park, making extremist statements and praying with a flag used by Isis and al-Qaeda.

Witness M said the footage was reviewed by a different police team, adding: “I wasn’t aware of Khuram Butt within that programme, but I was aware that an assessment had been made around the programme.”

The officer told the court that another police team found “there were no criminal offences that required further investigation” and that his investigators already knew Butt was associating with the extremists shown in the documentary.

He conceded that there was a wealth of evidence of Butt’s extremist mindset, but insisted there was no evidence that he was “actively involved” in planning an attack and at one point appeared to be associating less with jihadis.

Witness M said that in 2016, intelligence led police to believe that he was more focused on travelling to join Isis in Syria, and that the MI5 operation on Butt was suspended in the wake of the Paris attacks.

“It was a particularly busy time across policing and MI5, the level of attack-planning that was being directed at us was pretty unprecedented,” he added.

“There had to be a reprioritisation of resources and focus our resources where the bigger threat was.”

The court heard that the MI5 investigation into Butt resumed in April 2016 but that authorities did not attempt to stop him becoming accredited by the Security Industry Association as a door supervisor, or getting a job on the London Underground.

Police were unaware Khuram Butt was in the Channel 4 documentary (Channel 4)

Witness M said the work could be seen as a “stabilising influence” and there was no evidence that Butt sought out the jobs for terrorist purposes, even though police knew he was working at Westminster station.

The officer told how officers later arrested Butt for alleged fraud and for attacking a counter-extremism campaigner, but neither case was prosecuted and he was not detained.

The fraud investigation sparked the discovery of illegal terrorist propaganda on Butt’s phone, but police had decided not to charge him with possession of extremist material because there was not a strong enough chance of disrupting any potential terror plot.

“We were still investigating a potential a potential attack,” witness M said. “It was unlikely to have resulted in significant disruption and we were still trying to shed some more light on what was going on in the wider picture around the attack plot.

“So the decision was not to proceed with the arrest for sharing that material.”

The counterterror officer gave evidence amid tight security, with journalists cleared from Court One and listening by videolink with a camera trained on an empty witness box.

He also detailed other pieces of information that police were unaware of, but indicated Butt was associated with the two other attackers.

Investigations after the attack on 3 June 2017 found he met with accomplices Rachid Redouane and Youssef Zaghba at the Ummah Fitness centre in Ilford, which was itself run by a senior member of ALM – Sajeel Shahid.

Zaghba and Butt both volunteered at Ad-Deen Primary School in Ilford, which was run by Shahid’s wife and has since been shut down.

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Butt and Redouane travelled together to Leeds in April 2017 to buy a car, the court heard, and all three attackers went on regular trips together to take their children swimming.

But in May 2017, MI5 lowered the risk level assigned to Butt, while classing his ability to launch an attack as “moderate”.

Two days before he, Redouane and Zaghba launched their massacre, prosecutors advised there was not enough evidence to charge him with fraud.

Xavier Thomas, 45, Christine Archibald, 30, Sara Zelenak, 21, Sebastien Belanger, 36, James McMullan, 32, Kirsty Boden, 28, Alexandre Pigeard, 26, and Ignacio Echeverria, 39, died in the attack, which lasted less than 10 minutes.

The inquest into their deaths will be followed by a separate inquest heard by a jury into the deaths of the three attackers.