The Prime Minister will host an urgent Cobra meeting after the Remembrance Sunday car explosion outside a Liverpool hospital was declared by police to have been a terrorist attack.

Downing Street said Boris Johnson would lead the committee, convened during periods of national emergency, on Monday afternoon after police said the motive behind the incident was unclear.

Assistant Chief Constable Russ Jackson, from Counter-Terrorism Policing North West, said the man who died in the blast brought a homemade bomb with him into a taxi and asked to be taken to Liverpool Women’s Hospital

He was picked up in the Rutland Avenue area of the city and taken to the hospital shortly before 11am on Sunday.

As the car reached the passenger drop-off point, it exploded.

So far four men have been arrested under terrorism laws in the Kensington area of Liverpool – three aged 21, 26 and 29, who were held on Sunday, and a man aged 20, who was detained on Monday.

Speaking to journalists at Merseyside Police headquarters, Mr Jackson said: “It is not clear what the motivation for this incident is.

“Our inquiries indicate that an improvised explosive device has been manufactured and our assumption so far is that this was built by the passenger in the taxi.

“The reason why he then took it to the women’s hospital is unknown, as is the reason for its sudden explosion.

“We are of course aware that there were Remembrance events just a short distance away from the hospital and that the ignition occurred shortly before 11am.

“We cannot at this time draw any connection with this but it is a line of inquiry we are pursuing.

“Although the motivation for this incident is yet to be understood, given all the circumstances it has been declared a terrorist incident and counter-terrorism policing are continuing with the investigation.”

He told journalists that police know the identity of the attacker but will not confirm it at this stage.

Officers are searching two addresses – one in Sutcliffe Street and a second at Rutland Avenue in Sefton Park, where “significant items” have been found, he said.

A cordon is in place and eight families have been evacuated as a result.

Investigators have “attributed” the passenger to both the addresses but investigators are not yet sure where he lived.

They are looking into his associates, telephone records and purchases he may have made.

The driver of the cab, named locally as David Perry, was treated in hospital after fleeing the car just before it burst into flames, and has now been discharged.

He was praised by the Prime Minister for behaving with “incredible presence of mind and bravery”, and lauded for his “heroic efforts” by the mayor of Liverpool, Joanne Anderson.

Liverpool Women’s Hospital said visiting access had been restricted “until further notice” and there was an increased security and police presence on the site.