An explosion outside Liverpool Women's Hospital on Remembrance Sunday has been declared a terror incident by police.

A taxi exploded and was engulfed in flames just before 11:00 GMT at a drop-off zone near the entrance, killing the passenger and injuring the driver.

The cabbie, named locally as David Perry, was declared a hero by Liverpool Mayor Joanne Anderson for locking the suspect inside the vehicle.

Four men have been arrested in the city in connection with Sunday's incident.

The taxi passenger appears to have made an "improvised explosive device" which caused the blast, said Head of Counter Terrorism Policing North West Russ Jackson.

The man's motivation was "yet to be understood", added Assistant Chief Constable Jackson.

He told journalists he understands the Delta Taxis driver picked up a passenger in Rutland Avenue, near Sefton Park, on Sunday.

"The fare - a man - had asked to be taken to Liverpool Women's Hospital, which was about 10 minutes away," said ACC Jackson.

"As the taxi approached the drop-off point at the hospital an explosion occurred from within the car.

"This quickly engulfed it in flames."

He added: "Remarkably the taxi driver escaped from the cab.

"He has been treated for his injuries that he sustained and he's now been released from the hospital."

Fourth man

ACC Jackson continued: "We are... aware there were Remembrance events just a short distance away from the hospital and that the ignition occurred shortly before 11 am.

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

He confirmed a fourth man was arrested earlier in the Kensington area of the city.

ACC Jackson said a 20-year-old was in custody.

Three other men - aged 21, 26 and 29 - were detained on Sunday in Sutcliffe Street, Kensington.

All four will be interviewed later by counter-terrorism detectives. The men have all been held under the Terrorism Act.