SYDNEY • Three of four people arrested in Australia over a terror- linked murder by a radicalised teenager have been released without charge, in a move police admitted was "incredibly frustrating".

The four, aged between 16 and 22, were seized during large-scale dawn raids across Sydney on Wednesday, after police employee Curtis Cheng was shot outside New South Wales state police headquarters last week.

Farhad Jabar, 15, shot the 58-year-old man in the back of the head while reportedly shouting religious slogans, before being gunned down in an exchange of fire with police.

The Sydney Morning Herald, citing police sources, said that Jabar was allegedly recruited by a group of extremists in western Sydney, who thought they were under too much surveillance to carry out the murder themselves.

New South Wales state Police Commissioner Andrew Scipione said it was clear that Jabar was radicalised and had "terrorist links", but there was not enough evidence to hold three of the four men detained. An 18-year-old remains behind bars.

"Only when we have sufficient evidence that can put us in a position where we can charge an offender" can suspects be brought to justice, he told commercial radio station 2GB. "We have taken a lot of material during the course of these searches and that's going to take us a long time to go through... It is incredibly frustrating for us."

Prime Minister Malcolm Turnbull has said the attack "appears to have been an act of terrorism".

AGENCE FRANCE-PRESSE