A man killed in a suspected terrorist attack in London yesterday was a member of the Armed Forces, senior Whitehall sources have confirmed.

Two men spent the night under arrest in hospital as counter-terrorism police investigate the killing in Woolwich near the Royal Artillery Barracks.

One of the attackers behind the barbaric killing, whose hands were covered in blood, was filmed by wielding a meat cleaver saying he carried out the attack because British soldiers kill Muslims every day.

The killers are of Nigerian background and it is understood the men are most likely to be British citizens converted to a radical form of Islam.

They are not thought to have links to terror groups based in Nigeria such as the jihadist militant organisation, Boko Haram.

Anti-terror police investigating the killing have searched a property 150-miles away in Newmarket.

Detectives swooped on an address in Saxilby.

A Lincolnshire Police spokesman said: “We can confirm that the Metropolitan Police executed a search warrant under PACE (Police and Criminal Evidence Act) at an address in Lincolnshire.

“This is in connection with the ongoing investigation into the murder of a man in Woolwich.

“The Metropolitan Police are not prepared to discuss the matter further at this stage.”

Prime Minister David Cameron chaired a Cobra emergency response meeting, which was attended by politicians, senior police officers and the head of MI5, this morning.

Speaking afterwards he said: “The people who did this were trying to divide us. They should know something like this will only bring us together and make us stronger.

“One of the best ways of defeating terrorism is to go about our normal lives.”

Security has been tightened at Woolwich Barracks, which houses a number of the King’s Troop Royal Horse Artillery and independent companies of the Grenadier and Coldstream Guards, and all London barracks.

The two suspects were shot by police after the attack in John Wilson Street at 2.20pm yesterday.

One is in a serious condition while the other is also being treated for injuries.

Witnesses described seeing a “beheading” while another described seeing a man wearing a Help for Heroes T-shirt being attacked with a machete-style knife and dumped in the road.

A vehicle believed to be involved in the incident has been towed away from the scene - it is thought the victim may have been hit by the car before he was attacked.

The Muslim Council of Britain said the murder was “a truly barbaric act that has no basis in Islam and we condemn this unreservedly”.

Meanwhile, a man who was arrested on suspicion of attempted arson and possession of an offensive weapon at a mosque in Braintree last night remains in custody.