A suspect package was attached to a vehicle as armed officers searched Parliament, according to a House of Lords member.
A police office was stabbed and his attacker shot by officers, after he had mowed down several pedestrians as he drove a grey Hyundai i40 across Westminster Bridge.
Brian Paddick, a former police chief, said police searched Parliament and he said he was told a package was attached to a vehicle while the House was in session.
"Armed officers searched the whole of the Parliament estate to make sure there were no suspects outstanding."
Metropolitan Police confirmed they were called to a firearms incidents at around 2.40pm and Commander BJ Harrington said more officers would be deployed this evening while people are making their way home.
Parliament was suspended earlier Wednesday afternoon and members of parliament were safely evacuated from the House of Commons.
Mole Valley's MP, Sir Paul Beresford, said he had now been moved to Westminster Abbey after being in lockdown within the Commons.
Sir Paul said shortly after 5pm: "We had been voting inside the chamber. There was complete calm but there was an astonishing number of policemen inside.
"We've been moved over to Westminster Abbey and are now waiting to be vetted. They want to check there's no one here that isn't supposed to be. There's an awful lot of us and I think we'll be here most of the night."