‘Terrorist’ goes on London machete rampage

A knife-wielding "terrorist" has gone on a stabbing rampage on a busy London street, seriously injuring three people.

The man, who reportedly had terror links, was shot dead by police just after 2pm local time (1am AEDT).

British police declared the attack as "terrorist related", but had yet to publicly address the condition of the two victims.

"The circumstances are being assessed; the incident has been declared as terrorist related," the Metropolitan Police said in a statement.

"We believe there are three injured victims. We await updates on their conditions.

"The scene has been fully contained."

Frantic witnesses heard gunshots and saw the man collapse on the footpath on Streatham High Road in the London borough of Streatham.

The man was reportedly carrying a machete and had silver canisters on his chest in the second attack in the UK capital in two months.

Kiranjeet Singh, 38, told The Sun that the suspected terrorist stole a 25cm knife from his brother's bargain shop before leaving a trail of injured people in his wake.

He stabbed a terrified woman in the back before she ran away screaming in pain, another witness said, before slashing a young man in the chest with a "huge knife".

Panicked people urged the wounded man to "stay with us" as he lay gravely injured on the ground.

Armed police raced to take down the knife-wielding man - thought to be wearing something resembling a suicide vest - and shot him three times.

Security sources have said it is being treated as an "Islamist" attack - after tentative police were seen approaching his body.

Police shouted for people to "get back" as they cleared the area of shoppers and bystanders immediately after the shooting.

One horrified witness who watched the sickening scenes unfold told The Sun: "I was outside having a cigarette near [supermarket] Argos and Iceland when I saw a woman in hysterics running up the street screaming, 'He stabbed me in the back.'

"As that was happening I looked up and saw another commotion and a man run away with a huge knife.

"There was a guy on the floor covered in blood with a huge gash down his side.

Witnesses said the attack happened in front of a Boots pharmacy.

The attack sparked panic at the Odeon Cinema in Streatham, with people told to get to the back of the theatre because of fears the attacker had a bomb outside.

There were images of the attacker with silver canisters strapped to his chest on social media and also reports of two bags he had been carrying.

British Prime Minister Boris Johnson, who promised to crack down on terror suspects' bail after November's London Bridge attack, praised police.

"Thank you to all emergency services responding to the incident in Streatham, which the police have now declared as terrorism-related. My thoughts are with the injured and all those affected," he said on Twitter.

London Mayor Sadiq Khan tweeted:

"I am in close contact with the Met Commissioner and local representatives, and want to thank our police, security and emergency services staff for their swift and courageous response. They truly are the best of us.

"Terrorists seek to divide us and to destroy our way of life - here in London we will never let them succeed."

UK Home Secretary Priti Patel praised the "brave" emergency services who attended.

"I am being kept updated by Metropolitan Police on this afternoon's incident in Streatham, which has been declared terrorist-related," she posted on Twitter.

"My first thoughts are with the victims, our brave police and emergency services and their families."

Gulled Bulhan, a 19-year-old student from Streatham, was walking down Streatham High Road when the attack happened.

"I was crossing the road when I saw a man with a machete and silver canisters on his chest being chased by what I assume was an undercover police officer - as they were in civilian clothing," he said.

"The man was then shot. I think I heard three gun shots but I can't quite remember.

"After that I ran into the library to get to safety.

"From the library I saw a load of ambulances and armed police officers arrive on the scene."

Mr Bulhan said people began running into nearby stores after the incident.

"We were all informed to stay in buildings by armed police, until we were evacuated," he said.

British police said the attack was terror-related.

"The circumstances are being assessed; the incident has been declared as terrorist related."

It is the second attack in less than two months after Usman Khan was shot dead on London Bridge after killing two people at a rehabilitation conference for reformed terror offenders.

London Ambulance Service said it was on the scene in south London this morning.

"We have a number of resources attending an incident in Streatham High Road," a statement said.

- with The Sun