The Manchester suicide bomber, Salman Abedi, was reportedly known to MI5 but was not under active investigation before he carried out his fatal attack.
MI5 has started an internal review on whether there are lessons to be learned from its handling of intelligence on Abedi before he blew himself up at an Ariana Grande concert at the Manchester Arena.
"This is a review that would seek to answer whether there are lessons to be learned from how the Security Service handled the intelligence on Abedi," an anonymous source told Reuters.
Before he carried out the attack, Abedi, a British-born Muslim whose parents were from Libya, was one of 20,000 people who was known to MI5 but not one of the 3,000 people who are under active investigation, according to the source.
The Manchester Arena bombing inquiry has now spread to the south coast of England, with the arrest of a man in West Sussex.
The 23-year-old was arrested on suspicion of terror offences at an address in Shoreham-by-Sea in the early hours of Monday morning, Greater Manchester Police (GMP) said.
The arrest brings the number of people arrested in connection with the investigation to 16, with 14 men now held in custody over the attack that left 22 dead and over 100 injured.
Shortly after the arrest was announced GMP said officers had also executed a warrant in the Chester area of Cheshire, although no arrests had been made.
Police have been working round-the-clock since Abedi blew himself up with a home-made nail bomb amid concert-goers, many of them young girls, at the Manchester Arena in a horror that shook the nation.
The race to dismantle a suspected network connected to the terrorist saw a flurry of arrests over the weekend, with armed police launching raids in the Gorton and Old Trafford areas of Manchester.
Additional reporting by agencies
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