Police were warned Streatham terrorist Sudesh Amman had radicalised Manchester Arena bombing mass-murderer Hashem Abedi behind bars - but was still freed from jail.
Prison authorities scrambled to tell counter-terror teams he had groomed Hashem, the mastermind who had earlier teamed up with bomber brother Salman for the appalling atrocity.
But despite this - and Amman saying he wanted to kill the Queen - he was set free before stabbing two people in a street attack in Streatham 10 days later.
The 20-year-old extremist boasted about wanting to murder the Royal in HMP Belmarsh and being the youngest terror convict in the jail.
Details on Amman's twisted goals were spelled out in a prisoner report but he was still let out to carry out his February 2020 attack.
He stabbed Monika Luftner, a 52-year-old nursery school teacher, in the back before knifing a male passer-by in the torso before being shot dead by police.
Jurors at the second day of his inquest at the Royal Courts of Justice were told the paperwork said: 'He 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 report also described how Amman abused a prison officer and smashed the observation window, as well as asking a fellow inmate to make a weapon and attack another prisoner.
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.'
Jurors were told Amman was subject to a total of 30 'stringent licence restrictions' following his release from prison, including sticking to agreed curfew hours and not using any internet-enabled devices without permission.
He had been serving a 40-month sentence for 13 terror offences after pleading guilty to six counts of possessing material useful for terrorism and seven counts of disseminating terrorist material online.
Prison authorities warned police Amman, right, had groomed Abedi, left, while he awaited trial over the Manchester Arena bombings physically carried out by his brother Salman
Sudesh Amman running along Streatham High Street captured on CCTV before the attack
Amman lies dead on the pavement on Streatham High Road after being shot dead by police
Armed police shot dead Amman after he grabbed a knife and stabbed a man and a woman
Detective Chief Inspector Luke Williams from the Metropolitan Police said staff at the approved premises where Amman lived said he 'was polite to staff and didn't cause them concern'.
He said Amman had been provided with a Nokia 105 mobile phone which did not allow any internet capability, and had meetings with both a practical and theological mentor to assist with his return to the community.
But Mr Williams added that reports said Amman still 'appeared proud to have been the youngest terrorist offender at Belmarsh - and didn't seem remorseful.'
He confirmed details about Amman's life in the build-up to his arrest for terror offences in May 2018.
Jonathan Hough QC, counsel to the inquest, said Amman's phone was analysed following his arrest and among the thousands of lines of chat was evidence that Amman 'talked about preferring knives over guns and making sure he targets those who don't look like Muslims'.
Mr Hough said: 'He talked about wanting to commit a terrorist attack and asks (his apparent girlfriend at the time) if she can order him a machete.'
The mobile phone given to and used by Sudesh Amman, which did not have internet access
CCTV taken from Poundland of Sudesh Amman, buying items used in his fake suicide belt
The remnants of a hoax suicide belt used by Sudesh Amman in his 2020 Streatham attack
CCTV images were released of Amman setting out from his bail hostel on the way to carry out his terror attack last year
Amman was seen walking the streets of Streatham moments before his terror attack, in these CCTV images released by the Metropolitan Police
Timeline: Streatham 2020 terror attack
January 23, 2020
Sudesh Amman, a 20-year-old from Harrow in north-west London, is automatically released from prison having been handed a 40-month sentence for 13 counts of obtaining and distributing material used for terrorist purposes. He is released to a probation hostel in Streatham, south London.
Amman, who is originally from Coventry, is under day-time surveillance by plain clothes officers.
A decision is made to allow those surveillance officers to carry firearms.
Amman's covert surveillance is relaxed slightly, meaning there would be no coverage between 6am and 10am due to intelligence about Amman's lack of movement at this time of the day.
Amman is seen looking at knives in a shop and buying items that could be used to create a hoax suicide belt. These items include a roll of tape, aluminium foil and four bottles of Irn Bru soft drink. It is then decided to put Amman under 24-hour surveillance.
Amman is placed on 'round-the-clock' - i.e. 24-hour - surveillance. This includes armed covert police, as well as uniformed officers nearby.
1.22pm - Amman leaves his approved premises, the probation hostel, at Leigham Court Road.
1.50pm - Amman is seen on Streatham High Road. He is said to be walking 'very slowly'.
1.57pm - The 20-year-old enters a shop called Low Price Store. He is inside for barely a minute, and emerges with a knife which he has stolen. He is pursued by undercover police. Amman stabs two people - a man and a woman - before being shot at by an armed officer.
1.58pm - Amman, reaching the Boots shop, turns to face the police. Police shoot at him five times, with two shots hitting him. A total of 62 seconds after running from the shop, Amman falls to the ground.
2.40pm - A police explosives expert arrives on the scene to check the device around Amman's waist, which was identified as a hoax.
3.24pm - Sudesh Amman is pronounced dead by a paramedic.
A folder on Amman's computer named 'Chemistry' included videos and instruction manuals concerning use of weapons.
Another instruction manual was 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.
Yesterday the inquest showed him in CCTV images setting out from his bail hostel on his way to carry out the horrendous attack.
Amman - from Harrow - was automatically released from prison on January 23, 2020, and placed under 24-hour surveillance by police and security services.
Just 10 days later, the terrorist ran into a shop on Streatham High Road, stole an eight-inch carving knife, and stabbed two people on a 62-second rampage while wearing a fake suicide belt.
He stabbed Monika Luftner, a 52-year-old nursery school teacher, in the back.
He then knifed a male passer-by in the torso before being confronted by two armed surveillance officers.
Police fired six bullets and Amman was pronounced dead 90 minutes later, once explosives experts had established that the belt wrapped around his body was harmless.
Amman was said to have been a prefect and mentor at his school before developing 'behavioural issues' and showing signs of 'anger', according to counter-terrorism police.
An inquest heard how Amman's mother had told officers from the Met Police's counter-terrorism unit how her son used to become angry with her, his brothers and other people while he was at school.
He also became more religious from around 2014, when he began praying in his bedroom, according to his mother.
As his behaviour worsened, Amman was later suspended three times from school, including for being under the influence of alcohol and a 'serious weapons offence'.
The convicted terrorist was shot by armed police as he carried out a knife attack in Streatham in January last year - 10 days after being release from prison.
It was also revealed how police were so concerned about pleaded with a prison governor not to release him because he still held 'extremist views' and had told an inmate he was 'not finished with non-believers', his inquest heard today.
However, the request to extend Amman's custody was turned down because the earlier offence that he had committed could not justify an extension of his sentence, a senior Met officer told jurors.