Boris Johnson said it was "probably clear from the outset" that Khan was "too tough to crack" when it came to rehabilitation.
The Prime Minister responded to criticism by father of David Merritt, whose son Jack was stabbed to death by Usman Khan, blasted the Prime Minister for trying to make political gain from the killing.
He said Jack would not have agreed with "vile propaganda" promoted by the Tories in the aftermath of the attack.
Today Mr Johnson said he felt a "huge amount of sympathy" for the family of former University of Cambridge students Saskia Jones, 23, and Jack Merritt, 25, who died in the London Bridge terror attack.
The Prime Minister said too many people are released automatically and that needs addressing via legislation.
Asked what happens to those people who can never be rehabilitated, Mr Johnson replied: "I'm just saying that in his case (Khan), I think that probably is true that people can't be rehabilitated and I think it varies very widely.
"There are unquestionably some cases which are just too tough to crack and alas he appears to have been one of them, and I'm afraid it was probably clear from the outset that that would be so."
Mr Johnson has come under fire for blaming Labour's sentencing rules for Khan's release despite judges having the option of giving him an indeterminate sentence.
Following a series of heated changes over the weekend involving Mr Johnson and Jeremy Corbyn, Dame Louise Casey – a former government adviser on community cohesion – said both sides were oversimplifying the issue.
Jo Cox's widower Brendan Cox tweeted: "When there's a terror attack it's right politicians say what they would do to stop them in future and how they would look after victims. What we don't need is cheap point scoring or blame shifting."
The Tories have sought to blame legislation passed under the last Labour government for the early release of Khan, which meant he was let out of prison halfway through his sentence.
Labour in turn accused the Conservatives of starving the prison and probation services of resources, warning that it was impossible to "keep people safe on the cheap".
Mr Corbyn has also linked the radicalisation of Khan – who was convicted of terrorist offences in 2012 – to the Iraq war.
However, Dame Louise said the issues were more complex than either side was prepared to allow.
"What happened over the weekend, the politicisation of this – Jeremy Corbyn saying this is all about austerity and today saying it's all about the Iraq War, and Boris Johnson saying this is about being tough on crime and longer prison sentences – the truth is these things are much more difficult," she told BBC Radio 4's The World at One.
"It has got very political, very quickly about what is happening in prisons.
"Either you have to say this is all about cuts to the Prison Service and it is all about re-offending or you are saying 'Actually there is no hope, these people are going to be dreadful when they come out, we should never the let them out of prison'.
"I think the answer lies somewhere in the middle. Actually I don't think we are resourced in prisons sufficiently to deal with this.
"At the same time I actually happen to agree that it should never have been an automatic that somebody was released halfway through their sentence for a terrorist offence."
Boris Johnson said that the sentence he Khan received was also too light telling reporters in Southampton: "I don't think that was long enough in view of the gravity of his offence – which was to conspire to blow up the stock exchange and to cause other types of mayhem – and in view of the view that was taken of him by the initial sentencing judge, Judge Wilkie, and looking at what the judge had to say about him it's clear he was viewed as a very serious threat."
Asked what is done with those people who can't be reformed, Mr Johnson said: "I think you have to do what you can and a great deal of effort was gone to to try to change him and try to change his ways, but in the end better I'm afraid for the protection of the public, better for the protection of society and of us all to keep him in rather than run the risk of letting him out.
"That's what we're proposing."
Mr Johnson, asked if other extremists such as Khan could ever be de-radicalised, replied: "That is a very profound question and there is an issue there that we need to talk about frankly as a society and when we look at some of the problems that we come across in trying to de-radicalise people, we have to face the grim reality that in some cases it is really very difficult.
"I think this was one of those cases and, alas, I think it also was pretty obvious from the kinds of things he was saying and continued to say that he was not really a suitable candidate for automatic early release.
"Yet under the law as it stood when he was sentenced, that was the 2008 legal system, there was no parole board, no probation system, there was no means of reviewing his release – he was just sprung automatically.
"What I'm saying is our job is to keep the public safe and that's what we want to do."
Mr Johnson, told he appeared more open to liberal ideas on law and justice in the past, said: "Look at my 2012 manifesto on crime … I've campaigned for a long time for longer sentences for serious and violent offenders."
He added: "What I also think is you should try to rehabilitate people and you should try to change things where you can – I certainly believe in education in prison and I believe that's why we're putting £2.5 billion into prison, I want to try to turn people's lives around if you can.
"But you have to be realistic and what you must not have is a system of automatic early release and it was the automaticity that I'm afraid let us down here, because in the end the law had no choice but to let him out and then to hope that things would turn out well.
"I don't think that was a reasonable expectation given what we knew about him."
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