Khalid Masood came back from jail obsessed with Islam, neighbours have said, after serving two years for a brutal attack that he tried to blame on ‘racism’.

After leaving prison the 54-year-old convinced his elder daughter, now a Muslim who wears a full face veil, to convert to Islam and his attempts to convert the other daughter caused a “family struggle”.

“When he got out of prison he decided he wanted to live an Islamic life and didn’t want anything to do with his past life at all”, said a resident of the Sussex village Northiam, where Masood had lived since 1991 up until leaving his wife and daughters following his jail sentence.

“In prison he was radicalised by other inmates and converted to Islam. He became a real extremist”, added the villager, who declined to be named.

Masood, then known by his birth name of Adrian Elms, was jailed for a vicious attack at the Crown and Thistle pub in Northiam in July 2000 which left victim Piers Mott with a “three inch gash on his left cheek” which required 20 stitches.

He told Hove Crown Court he snapped because of racism in the village and claimed he had been ostracised because villagers had a “view of black people”.

Though Masood tried to blame bigotry for the appalling violence, the man behind the Westminster attack himself was described as having himself been “racist” by Alice Williams, who knew him while landlady of the Rose and Crown pub near Rye.

Describing Masood as “intelligent”, but “always slightly sinister”, she said: “He always had a chip on his shoulder.”

And neighbours who knew the jihadi at his most recent regular address in Winson Green, Birmingham, said Masood regularly ranted “about how British people didn’t bring up their kids right”.

“I am a Catholic and he had a go at me saying the school I sent my children to was rubbish and not as good as Muslim schools,” said nextdoor neighbour Anna Goras, who chatted with Masood over the garden fence.

Goras said she almost felt the jihadist had a “split personality” at times, describing how Masood’s face “would change in a moment” and “turned to pure evil when he spoke about religion”.

“On Sundays he always wore white flowing Islamic robes and I never saw his wife without a veil.

“He was also very strict and only let his children play with ours a few times.

“It’s hard to think that a man who gave me and my kids a lift home from school could have turned into a killer.

“Looking back you could see the hatred was in him because of his religion. It’s terrifying.”

Partner Seb Bednarczyk added: “He was a big guy and you would not think he could be a threat most of the time.

“But when he spoke about being a Muslim he looked like a real hard man. When he was like that you wouldn’t cross him or argue with him about his views.”

Masood’s abrupt religious conversion will fuel concerns about the rising threat of Islamic extremism in prisons, which a government-ordered review last year concluded was a “growing problem”.

In April, prison union leaders said Muslims had turned parts of a Leicestershire jail into a “no-go zone” for non-Muslims, and running an entire block under Sharia law.

Non-Muslim inmates at HMP Gartree, a maximum security prison, were said to have to conform to rules set by Muslim inmates, and are refusing to be moved to the block in question for fear of being forced to convert to Islam.

“There is huge pressure put on them to convert and a threat of violence if they don’t,” a source told the Sun.