"Terrorism has changed" as Britain faces a "new and dangerous threat" from extreme violence, Sir Keir Starmer has said in a statement on the Southport murders.
Speaking in Downing Street after the government announced a public inquiry into the case, the prime minister said failings by the state "leap off the page".
Axel Rudakubana had been referred three times to anti-extremism programme Prevent before killing Bebe King, six, Elsie Dot Stancombe, seven, and nine-year-old Alice da Silva Aguiar last July.
Sir Keir said if the law needed to change, it would - as he denied there had been any cover-up over the killer’s background.
He said a review would be carried out into "our entire counter-extremist system", adding that he had asked cross-bench peer and new independent Prevent commissioner Lord Anderson of Ipswich KC "to hold this system to account, to shine a light into its darkest corners".
The prime minister said in the past the predominant threat was highly organised groups like al-Qaida, but warned the new threat was acts of extreme violence by "loners, misfits, young men in their bedroom" accessing material online and "fixated on that extreme violence".
Sir Keir said he had known details of the case emerging following the attack, but contempt of court laws forbade him from disclosing them sooner.
He said: "If this trial had collapsed, because I or anyone else had revealed crucial details while the police were investigating, while the case was being built, while we were awaiting a verdict, then the vile individual who committed these crimes would have walked away a free man."
As well as being referred to Prevent three times between 2019-2021, Rudakubana was excluded from school aged 13 in October 2019, after which he returned to the school in December that year with a hockey stick and assaulted a pupil, breaking their wrist.
Lancashire Child Safeguarding Partnership said Lancashire Constabulary responded to five calls from his home address, between October 2019 and May 2022, relating to concerns about his behaviour.
Rudakubana also called Childline several times as a young teenager, eventually telling the service he was going to take a knife into school because of racial bullying.
The prime minister said he would not let any state institution "deflect from their failure - failure which in this case, frankly, leaps off the page".
He said it was "clearly wrong" Rudakubana was deemed not to meet the threshold for intervention from the Prevent programme, and the Southport victims’ families had been failed.
"And I acknowledge that here today," he added.
Axel Rudakubana will be sentenced on Thursday
The government’s independent reviewer of terrorism legislation, Jonathan Hall KC, there needed to be a review of Prevent and the mechanisms for dealing with people obsessed by violence but ideology.
He told the BBC Radio 4 Today programme: "What I would hope is that someone... is going to look at, ’how do you pick up these people for whom Prevent wasn’t really designed?’
"In its present format it needs to change because of the internet - that’s the key factor."
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