London mosque attack a 'terror incident'

London police have arrested a man after a terrorist incident" outside a mosque which left 10 people injured.

Police have declared a "major incident" after a van rammed into worshippers leaving a London mosque. (AAP)

Police have confirmed that an attack outside a London mosque where a man died and another 10 people were injured is being treated as a terror incident.

The man, who was being given first aid at the scene before the vehicle ploughed into pedestrians, died but police said it was unclear whether his death was directly linked. Eight others are in hospital, with two in a very serious condition.

A 48-year-old man suspected of being the driver has been arrested on suspicion of attempted murder, Deputy Assistant Commissioner Neil Basu said.

"This had all the hallmarks of a terrorist incident," Basu, senior national co-ordinator for counter-terrorism policing, said. "This was an attack on London and all Londoners."

Shortly after midnight, the hired vehicle swerved into a group of people leaving prayers at the Finsbury Park Mosque, one of the biggest in the UK, witnesses said. The attack comes during the Muslim holy month of Ramadan.

"This big van just came and went all over us," witness Abdulrahman Saleh Alamoudi told BuzzFeed News. "He (the driver) was screaming... 'I'm going to kill all Muslims'."

Police said the suspected van driver had been detained by members of the public before being arrested.

Usain Ali, 28, who was near the mosque at the time, said he heard a bang and ran for his life.

"When I looked back, I thought it was a car accident, but people were shouting, screaming and I realised this was a man choosing to terrorise people who are praying," he told Reuters. "He chose exactly the time that people pray, and the mosque is too small and full, so some pray outside."

The attack comes at a time of political turmoil in Britain, as May, weakened by the loss of her parliamentary majority in a June 8 election, plunges into divorce talks with the European Union.

She has faced heavy criticism for her response to a fire in a London tower block last Wednesday which killed at least 58 people, and for her record on security after a series of attacks blamed on Islamist militants.

"All my thoughts are with the victims, their families and the emergency services on the scene," May said.

The opposition Labour Party leader Jeremy Corbyn tweeted that he was shocked by the attack and expressed his sympathy for the affected community.

London Mayor Sadiq Khan said in a statement that the incident was "clearly a deliberate attack on innocent Londoners."

He later told BBC Radio 4's Today program: "Terrorism is terrorism, whether it's Islamist-inspired or inspired by others.

"London has been through an extremely difficult time, it's been a tough few weeks, but I'm so confident that we're going to come through this, we'll be strong, we'll stay strong and we won't allow these people to divide us."

He urged Londoners to "remain calm and vigilant" after the incident, which if confirmed as a terrorist attack would be the fourth in three months in the United Kingdom.

Muslim Council of Britain Secretary General Harun Khan said in a statement that the incident appeared to be "motivated by Islamophobia" and urged authorities to increase security outside mosques as the end of the holy month of Ramadan approaches.

The Evening Standard newspaper reported that the van appeared to have been rented in Wales, although there was no immediate confirmation of this from authorities.