The terrorist who murdered four people in Westminster was investigated by MI5 for “violent extremism” but was ruled out as a threat by security services before being “re-radicalised”, it was feared on Thursday night.

Khalid Masood, 52, was named by Scotland Yard as the Isil-inspired extremist who was shot dead inside the gates of Parliament on Wednesday, as eight suspected associates were arrested in raids in London and Birmingham. Last night it emerged that Masood was born Adrian Elms and is thought to have been radicalised in prison.

Nearly 20 years ago he was jailed for slashing a man across the face in an argument which had "racial overtones" in 2000.

He was charged in 2003 with grievous bodily harm, when aged 39, after being accused of stabbing a 22-year-old man in the nose in an incident in Eastbourne. The victim was left with serious facial injuries and needing cosmetic surgery. Elms, who was living in the Sussex seaside town at the time, was also facing two charges of possessing an offensive weapon, namely a knife and a baton, and is understood to have been jailed for the offences.

Two of his victims were on Thursday identified as mother of two Aysha Frade, a 43-year-old teacher, and American Kurt Cochran, 54, who was in London celebrating his silver wedding anniversary with his wife.

The attack claimed another victim as a 75-year-old man died in hospital last night. Police said the man was receiving medical treatment and the decision was made to withdraw life support.

There were calls for Pc Keith Palmer, 48, who was stabbed to death on the Parliamentary estate, to be posthumously awarded for his heroism. Islamic State of Iraq and the Levant claimed responsibility for the attack, saying Masood was a “soldier of the Islamic State” but no other link between the killer and Isil has been established.

Police and the security services now face serious questions about what they previously knew about the British Muslim convert, who had a string of criminal convictions for assault and had spent time in jail. Apparently anticipating criticism, Theresa May announced in the Commons that Masood was known to MI5 but insisted he was a “peripheral figure” in an investigation “some years ago” and was “not part of the current intelligence picture”.

Amber Rudd, the Home Secretary, also mounted a pre-emptive defence of the security services, saying “be careful before we point any finger of blame at the intelligence services” as she suggested that “we’ll discover more about this particular man and the people around him”. She added: “The fact that he was known to them doesn’t mean that somebody has 24-hour cover.”

Scotland Yard also volunteered that it had “no prior intelligence about his intent to mount a terrorist attack”. The force later admitted that Khalid Masood was an alias and not the terrorist’s birth name, without providing his true identity. It came as:

• It emerged that MPs had drawn up plans to replace the barriers breached by the attacker after identifying them as a security liability
• An urgent review of security around the Houses of Parliament was launched
• The Queen expressed her “deepest sympathy” for all those affected by Wednesday’s “awful violence”
• Boris Johnson, the Foreign Secretary, demanded that social media companies do more to take down extremist material that is “corrupting and polluting” minds
• An MP friend of Pc Palmer broke down in the Commons as he asked for the policeman to be given a posthumous honour
•  Londoners showed their defiance by gathering in Trafalgar Square for an evening vigil

Julian King, the EU commissioner for security, raised the possibility Masood had become re-radicalised, making him “incredibly hard” to stop.

He said extremists who dropped off terrorist watch lists as their perceived threat declined could become radicalised again and commit an attack without “plugging in” to a wider terrorist network where they might be detected.

His comments suggest that Masood may have become known to MI5 when al-Qaeda was the main terrorist threat, before switching his allegiance to Isil.

Masood had been "hanging out" with would-be jihadis who wanted to travel to fight abroad, a US government source said.

There was no indication Masood had himself gone abroad to fight but people he associated with had wanted to.

"The people he was hanging out with did include people suspected of having an interest in travelling to join jihadi groups overseas but the attacker himself never did so," the source said.

Police raided at least six addresses in their search for possible accomplices, arresting three women and five men on suspicion of preparing terrorist acts.

Birmingham flat raided over Westminster terror attackWatch | Birmingham flat raided over Westminster terror attack
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Records suggest that Masood, who had given his occupation as an English tutor on several forms over the years, was married to a 39-year-old woman named Rohey Hydara. Police confirmed that a 39-year-old woman held in the Olympic Park in east London was among eight people arrested. Others were women aged 26 and 21, and men aged 23, 26, 27, 28 and 58, all of whom were held in Birmingham.

Masood’s convictions, from 1983 to 2003, included grievous bodily harm, possession of offensive weapons and public order offences. He lived in London, Luton and most recently the West Midlands, but police raids were carried out in Brighton and Carmarthenshire as well as London and Birmingham.

Mrs May said 40 people were injured in the attack, with 29 treated in hospital, seven of whom are in a critical condition. The casualties included 12 Britons, three French children, two Romanians, four South Koreans, two Greeks, and one each from Germany, Poland, Ireland, China, Italy and the United States.

On Thursday the Prime Minister visited the Chelsea and Westminster Hospital, which is treating some of the wounded.(Telegraph)