Southport killer Axel Rudakubana admitted carrying a knife more than 10 times but was still able to buy a blade on Amazon, Yvette Cooper said.
The Home Secretary added public bodies “completely failed to identify the terrible danger that he posed”.
She told MPs: “Yet the action against him was far too weak.
“And despite the fact he’d been convicted for violence and was just 17, he was easily able to order a knife on Amazon.
“That’s a total disgrace and it must change.”
Rudakubana, 18, pleaded guilty to murdering three girls at a Taylor Swift-themed dance class in Southport, Merseyside, in July.
Despite contact with state agencies such as Prevent, aimed at countering terrorism, authorities failed to stop the attack which claimed the lives of Alice da Silva Aguiar, nine, Bebe King, six, and Elsie Dot Stancombe, seven.
Cooper announced an inquiry into the case, telling MPs on Tuesday the Government will “consider the wider challenge of rising youth violence” and that requests will be made to tech companies to remove online material accessed by Rudakubana.
Despite a previous conviction for violence, at the age of 17 he was able to order a kitchen knife from Amazon which he used to fatally stab the girls.
Tougher laws could be needed to regulate the “nightmares of the online world”, Sir Keir Starmer said after it emerged Axel Rudakubana trawled the internet for extreme violent content before the Southport atrocity.
The Prime Minister said users can view a “tidal wave of violence” on the internet, and that there are tougher rules for films shown in cinemas unlike for the material freely available online.
Mr Justice Goose said Rudakubana, of Banks, Lancashire, will be sentenced on Thursday.
He is not expected to receive a whole life order because he was 17 at the time of the murders.
Rudakubana, who was born in Cardiff, also admitted the attempted murders of eight other children, who cannot be named for legal reasons, class instructor Leanne Lucas and businessman John Hayes.
He further pleaded guilty to possessing a knife on the date of the attack, production of a biological toxin, ricin, on or before July 29, and possessing a PDF file likely to be useful to a person committing or preparing to commit an act of terrorism.
The ricin, a deadly poison, and the document were found during searches of the home in Old School Close which he shared with his parents, who are originally from Rwanda.
Documents about Nazi Germany, the Rwandan genocide and car bombs were found on Rudakubana’s devices during police searches of his home.
Sources said the material showed an “obsession with extreme violence” but there was no evidence he subscribed to any political or religious ideology or was “fighting for a cause”.
Misinformation about the Rudakubana’s identity spread in the aftermath of the Southport attack, fuelling violent disorder across the country, with mosques and hotels used for asylum seekers among the locations targeted.
Posts on social media falsely claimed Rudakubana arrived in the UK on a small boat.
The day after the murders, thousands turned out for a peaceful vigil in Southport, but later a separate protest in the town became violent as missiles were thrown at police and vans set on fire.
More than 1,000 arrests linked to disorder across the UK have been made since the attack, with hundreds charged and jailed.
