Britain's interior minister on Monday vowed tougher action against extremism after three people, including a US citizen, were stabbed to death in a park, the third terror-related knife attack in a year.

A 25-year-old man, widely identified as Libyan refugee Khairi Saadallah, was arrested near the scene of Saturday's attack in Reading, west of London, and was being held under counter-terrorism laws.

The incident has raised concerns about the early release of offenders from prison, after reports he had recently been freed from jail for non-terror offences.

The reports about the suspect's time in prison will again raise questions for Home Secretary Priti Patel about the early release of offenders after two previous terror attacks in the past year
The reports about the suspect's time in prison will again raise questions for Home Secretary Priti Patel about the early release of offenders after two previous terror attacks in the past year AFP / Ben STANSALL

It has also triggered questions because he was said to have been known to the security services.

Thames Valley Police said one of the victims was a local teacher, James Furlong. Another was his friend Joe Ritchie-Bennett, originally from Philadelphia, reports said.

US Ambassador to Britain Woody Johnson offered condolences to everyone affected. "To our great sorrow, this includes an American citizen," he wrote on Twitter.

In November last year, a convicted jihadist on parole was shot dead by police after stabbing five people -- two fatally -- near London Bridge in central London.

The police investigation is still going on in and around the site of the attack
The police investigation is still going on in and around the site of the attack AFP / Ben STANSALL

Armed officers then shot dead another assailant who stabbed and injured three people in the Streatham area of south London, in February.

The Streatham attacker had also been released early from a terrorism conviction and been under "active surveillance".

Flowers have been left at the entrance to Forbury Gardens park, where the attack took place
Flowers have been left at the entrance to Forbury Gardens park, where the attack took place AFP / Ben STANSALL

Both incidents prompted the government to move to tighten legislation on the early release of the most serious offenders, including those convicted of terrorism.

In a statement to parliament, interior minister Priti Patel hailed the unarmed police officer who tackled the suspect to arrest him, and another who gave emergency first aid to victims, as "heroes".

"They are the very best of us," she told lawmakers.

A flower laying ceremony, led by the Mayor of Reading, is held at Reading town centre for the three victims of a stabbing spree at the weekend, an attack which British police said they were treating as "terrorism".
A flower laying ceremony, led by the Mayor of Reading, is held at Reading town centre for the three victims of a stabbing spree at the weekend, an attack which British police said they were treating as "terrorism". AFPTV / Mathilde BELLENGER

But she said the security services faced an increasingly tough job in tackling the "complex, diverse and rapidly changing" threat of "poisonous extremist ideology", including from "lone actors".

"Swift justice will be done. Victims will be supported. And if further action is needed to stop terrorists in their tracks, this government will not hesitate to act," she added.

Witnesses to the attack in Forbury Gardens, central Reading, described seeing a lone assailant walking through the park shortly after 7:00 pm (1800 GMT) on Saturday, and stabbing them at random.

The attacker looked as if he had put his hands "in a big bucket of red paint", one said.

British media said Saadallah briefly came to the attention of the domestic intelligence agency MI5 last year and was said to have planned to travel abroad, reportedly to Syria.

But he was not deemed to be a substantial risk. His mental health is understood to be a factor for investigating officers.

Patel said she could not give more details because of the police investigation but said that since 2017, 25 terror plots, including eight from right-wing extremists, had been foiled.

"On any given day, they (the security services) make a series of calculated judgments and decision on how best to protect our citizens and country, based upon the intelligence that they gather," she added.

Mark Rowley, a former assistant commissioner for specialist operations in London's Metropolitan Police, said Saadallah would have been one of thousands of people on MI5's watch list.

Some 3,000 people are under investigation at any one time but there are up to 40,000 people who have come up on the radar in relation to extremist ideology, he told BBC radio.

Security Minister James Brokenshire said that despite the attack, Britain's terrorist threat level remains unchanged at "substantial", which means an attack is deemed "likely".

"People must remain vigilant," he told the BBC.