A convicted terrorist shot dead by police after going on a high street stabbing rampage signalled his intention to “commit jihad” and “kill the Queen” before he was released from prison, an inquest has heard.

Sudesh Amman, 20, was killed by undercover police on Streatham High Road in south London on February 2 2020 after stealing a knife and injuring members of the public at random during a broad daylight attack lasting 62 seconds.

Police decided against arresting Amman two days earlier, it emerged on Tuesday, despite calling an urgent meeting with MI5 to discuss him buying items later used to fashion a fake suicide belt he wore during the atrocity.

While in Belmarsh prison, Amman was also said to have revelled in his perceived notoriety, and was said to have mixed with other high-profile terror offenders including the brother of Manchester Arena bomber Salman Abedi.

Amman had been jailed for 40 months for preparing and engaging in acts of terrorism, but was automatically released into the community 10 days before the attack despite pleas from the police to keep him locked up due to the concerning intelligence about him.

On Tuesday, inquest jurors at the Royal Courts of Justice heard that Amman’s behaviour became increasingly violent while serving time in Belmarsh prison, and he shared extremist views including the desire to join so-called Islamic State (IS) and “kill the Queen”.

There was evidence that Amman maintained an interest in carrying out an attack, while excerpts from two Extremist Risk Guidance (ERG) assessments also highlighted his potential risk to the public upon release.

An intelligence report described him as “an impressionable young man who appears to crave status”, and he was said to have tried to convert fellow inmates to Islam.

Prison governor Jenny Louis described how Amman repeatedly sought to disengage with custody staff amid concern about his mixing with others.

He also found it “quite exciting” to be deemed a Category A prisoner, she said.

Ms Louis told the inquest: “I think it’s very rare that you have somebody who disengages so openly whilst in custody.”

Jurors were shown a prisoner report on Amman which said: “A young Asian prisoner who is in for terrorism… has been shouting different things on the wings such as ‘this place is full of non-believers’… and ‘everyone here will come under the black flag (of IS)’.”

He also “shared extreme views including a desire to kill the Queen, become a suicide bomber and join Isis”, the inquest heard.

Jonathan Hough QC, referring to monitored phone calls made by Amman from Belmarsh, said the Coventry-born terrorist had become “angry and agitated” with his mother and claimed prison officers were “racist”.

In another call, he said: “I was a bad person, I’m not going to lie to you, I still am a bad person but Allah will forgive me, you know I’m a bad person.”

Detective Chief Inspector Luke Williams, from the Metropolitan Police, told inquest jurors that Amman “appeared proud to have been the youngest terrorist offender at Belmarsh… (and) didn’t seem remorseful”.

Intelligence shared with police by prison authorities in October 2019 also suggested he was involved in radicalising other inmates at Belmarsh.

A list of names involved with Amman, shown to jurors, included terror plotter Hashem Abedi, who conspired with his brother Salman, who detonated a suicide bomb in May 2017, killing 22 people.

The inquest also heard that a note found in Amman’s prison cell contained an apparent pledge to IS.

Mr Hough said interrogation of Amman’s computer following his original arrest in May 2018 found internet references to “knives, guns” and potential attacks.

A folder on Amman’s computer named “Chemistry” included videos and instruction manuals such as one described as: “How to make a bomb in the kitchen of your mum.”

A notebook found in Amman’s bedroom listed what were believed to be his “Goals for life”, which included paradise and jihad.

The inquest also heard how Amman went on holiday with a friend’s family in March 2018 during which he was seen “reading a book about paradise”.

He also had a conversation with the friend’s mother about “fighting in Syria”, something the woman tried to discourage his interest in.

Amman was staying in a probation hostel in Streatham following his release from prison on January 23.

Police were aware he had bought items from Poundland on January 31 which were later used to create a fake suicide belt he wore during the attack.

But they said the decision was not made to arrest him because no offences were deemed to have been committed.

The inquest was adjourned until Wednesday.