Inquiries established no intelligence or evidence to suggest terrorist activity or that he was planning an attack, according to assistant commissioner Mark Rowley
One of the three men who committed the London terror attack on Saturday night was under police investigation at the time of the attack.
Khuram Butt, 27, has been identified as one of the perpetrators of the massacre, which left seven dead in the capital.
It emerged that Butt, a former security site guard, was known to the police and MI5 who opened an investigation into him in 2015, reports the Mirror.
A few months later, detectives received a call from a concerned member of the public on their anti-terrorism hotline with information about his extremism.
But inquiries established no intelligence or evidence to suggest terrorist activity or that he was planning an attack, according to assistant commissioner Mark Rowley, the UK’s top counter-terrorism officer.
Butt, 27, unfurled an Islamic State flag with others on national television in the documentary last year and was also reported to police twice.
He was one of three killers, along with Rachid Redouane, 30, who drove a rented van into crowds and stabbed multiple victims on Saturday night.
Butt, from Barking, East London, is believed to have led the trio who ploughed into pedestrians before stabbing revellers in pubs and bars on Saturday night.
Nicknamed "Abz" and born in Pakistan, the former security guard, KFC worker and Transport for London employee from Barking, east London, was known to police after associating with extremist Muslim preachers.
In 2016, he appeared in the documentary "The Jihadis Next Door" alongside a notorious preacher as they prayed to an Islamic State flag in a London park.
A complaint was made about them and the documentary showed them in a confrontation with police on a footpath.
Police continue to investigate the weekend atrocity that left seven dead and 48 injured.
Officers made 12 arrests on Sunday as they raided several addresses including a tower block.
At least two individuals have claimed they reported Butt to the anti-terrorist hotline as his radical views emerged over the last two years.
The brother-in-law of the attacker told The Sun: "We haven’t been told what’s going on.
It is understood the killer was a home-grown jihadi who came from Pakistan as a child but was brought up in the UK.
But in recent years he had become increasingly radical and was twice reported to anti-terror authorities, it has been claimed.
The revelations will put further pressure on Britain's security services after Manchester bomber Salman Abedi also appeared to have slipped through the net before carrying out the atrocity.
Butt was well-known in his local community, with one mother claiming she confronted him for trying to brainwash her children with extremist religious views in a park.
A neighbour said he immediately noticed the Arsenal away shirt Butt was wearing after being shot dead by police outside the Wheatsheaf pub on Saturday night.
He said: "I looked on Twitter and saw one of the terrorists who had been shot by police and he looked 90 per cent like my neighbour - he was even wearing the same Arsenal shirt that I had seen him in at 5pm that evening."
Officers unleashed a hail of bullets after the trio used a hired van to mow down pedestrians on one of the capital's busiest bridges.
They then leapt from the vehicle and began knifing people at random in bars and restaurants.
Butt lived in a block of flats with his wife and two young children which was raided by police early on Sunday.
Ken Chigbo, 26, who lives in the same building, described him as "really sociable" and said the killer had invited him to a barbecue just last week.
"I know he was quite a devout Muslim, I heard him talking about the Koran," said Mr Chigbo.
An online CV suggests the attacker worked for Transport for London and took a course in teaching English as a foreign language.
He also worked at fast-food chain KFC but quit around two years ago, according to a friend.
One pal told The Sun: "Back then he had a reputation for being a bit shady and taking drugs.
"He began stopping his neighbours in the street and asking them if they had been saying their prayers and when they had been to the mosque."
One man who knew the killer told the BBC he had become so concerned by his extremist views he rang the anti-terrorist hotline.
He claimed the attacker was not arrested and was allowed to keep his passport.
She said Abz would sit in a park opposite Northbury Primary School in Barking with two other men and talk to local children.
The mum-of-three said he would offer the kids sweets and claim edto be "teaching them about religion".
Another local who knew the attacker said he was kicked out of a mosque last year for supporting ISIS.