MI5 did not seek to prevent convicted terrorist Usman Khan from travelling alone to a conference in central London at which he murdered two people despite a warning that he might carry out an attack, an inquest has heard.

Khan, who targeted attendees at a prisoner rehabilitation event at Fishmongers’ Hall in November 2019, had been released from prison 11 months before the incident. During the attack, Khan, wearing a hoax suicide vest, killed Cambridge graduates Saskia Jones, 23, and Jack Merritt, 25, with knives and was later shot dead by police on London Bridge.

In evidence to the inquest on Thursday, a senior officer at the UK’s domestic intelligence agency, MI5, said that police and security service officers had opened an investigation into Khan in August 2018 in anticipation of his release from prison in December that year.

Speaking from behind a screen, the MI5 officer said the agency had received intelligence in November 2018 that Khan intended to “return to his old ways” after leaving jail, including potentially aspiring to commit a terrorist attack. However, she said this intelligence was “of unknown validity and it was uncorroborated”.

At a joint operations team meeting on November 18 2019, 11 days before the attack, the agency had been “heading . . . towards closure of the investigation” and wanted to discuss that with police colleagues, the MI5 officer, known for security reasons as Witness A, told the inquest. She added that in the 11 months after his release from jail, MI5 “had seen no activities of national security concern” by Khan.

Questioned repeatedly on why MI5 had not objected to Khan’s attendance at the Fishmongers’ Hall event, or suggested security measures such as a police escort, she said that at the time there had been “no intelligence that he should not be allowed to attend”.

The MI5 officer added that “preventing somebody from doing something can also have ramifications” and that those managing Khan would have been aware of the fact that he had a “very positive relationship” with Learning Together, the prison education organisation which ran the event.

However, the MI5 officer admitted that the agency had intervened during the summer after Khan’s release to prevent him from attending a professional course on how to operate a dumper truck. “There had been a number of terrorist cases in the past with terrorists using large vehicles as weapons and we did not think that putting this capability into Khan’s hands would be advisable,” Witness A told the inquest.

Before carrying out his attack, Khan served eight years in prison for his part in an Islamist-inspired plot to bomb the London Stock Exchange and build a terrorist training camp in Pakistan.

Ahead of his release from jail, MI5 increased Khan’s threat level from P4 to P3, designating him as an individual who required further action to determine whether he posed a threat.

Earlier this month Kenneth Skelton, Khan’s probation officer, told the inquest he had been unaware that MI5 had raised its security assessment of Khan before he left prison. He said that knowing this “would have had a huge impact upon his decision-making”.