Suicide bomber Salman Abedi was able to return to the UK from Libya and detonate his deadly device being reported to authorities five years ago, it was reported today.
However, the security services hit back at criticism saying that they have had 500 investigations and foiled 18 plots since 2013 including five since 52-year-old Islamic extremist Khalid Masood went on the rampage in Westminster on 22 March.
However, Ms Rudd has admitted attacker Abedi, 22, was known to the security services "up to a point".
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Security chiefs have repeatedly made clear that all extremists cannot be kept under close watch all the time
It emerged that he was one of a larger pool of former "subjects of interest", whose risk remained "subject to review".
Reports have suggested that people who knew Abedi had raised the alarm over his extremist views in the years before the atrocity.
But intelligence experts say it would have been surprising if the perpetrator had not, in some way, been known to authorities.
It emerged that he was one of a larger pool of former "subjects of interest"
One former senior figure said: "Knowing of someone's radical sympathies and knowing they present a real and present danger are very different things.
"So the essence of the security dilemma is triage, how to assess who and when to investigate very deeply given the resources needed for 24/7 surveillance.
"For every suspect that appears to be high priority another has to be pushed down the list.
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"So who not to investigate urgently is as important a decision as who might be worth investigating."
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Security chiefs have repeatedly made clear that all extremists cannot be kept under close watch all the time.
It is understood the scale of the threat being dealt with by counter-terror agencies is regarded as unprecedented.
It was revealed today that 18 plots have been foiled since 2013, including five since the Westminster attack in March this year. MI5 is managing around 500 active investigations.
Despite successes in stopping a number of plots, police and intelligence figures have repeatedly made clear that attacks are inevitable.
The official threat level – raised to the highest category of critical earlier this week – had stood at severe for nearly three years.
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Shashank Joshi, senior research fellow at security think tank the Royal United Services Institute, said: "It's easy, with the benefit of hindsight, to argue that these warnings were opportunities to stop the bomber.
"However, it's also possible that these warnings were followed up, surveillance was conducted, and nothing was discovered.
"Authorities cannot keep monitoring a suspect indefinitely, given limited resources.
"There may however be questions over his travel to Libya, Germany, and perhaps Syria, and his ease of return to the UK afterwards.
"It may point to weaknesses in the system of monitoring onward travel, especially as the number of UK nationals visiting Libya is likely to be fairly small."