CHAPELLE-SUR-ERDRE: A radicalised French ex-prisoner on a watch list of potential terrorist threats stabbed a policewoman inside her station in western France on Friday before being killed in a shoot-out with police, a government minister said.

The victim was seriously wounded but expected to survive, Interior Minister Gerald Darmanin said.

The assailant had been released from prison in March following an eight-year sentence for violent crime and was on a security services register for individuals who might pose a terrorism risk.

"He was flagged in 2016 for a strict practice of Islam, for radicalisation," Darmanin told reporters after visiting the police station in Chapelle-sur-Erdre, near Nantes, where the attack occurred.

The attack bore chilling echoes of the fatal stabbing of a female police administrative worker near Paris a month ago.

Stephanie Monferme was killed in the doorway to her police station by a Tunisian national who had watched Islamic religious videos glorifying acts of jihad before launching his attack.

Darmanin said the suspect in Friday's assault had been diagnosed as severely schizophrenic. He was under medical treatment and had been placed in an apartment where he was monitored by specialists, Darmanin added.

The suspect fled in a car but crashed and forced his way into an apartment building where he held a young woman hostage for more than two hours, local prosecutor Pierre Sennes said.

Some 250 officers were involved in the manhunt, according to authorities. Shortly after 1 p.m., the suspect emerged onto the balcony of his captive's flat and opened fired on officers below using a pistol he had stolen from the policewoman he knifed.

He fled into a field where he fired several more times at officers before he was shot in the stomach and died shortly after, police said.

Electronic equipment belonging to the suspect would be examined before it was decided whether France's anti-terrorism prosecutor would take over the investigation, Sennes told a news conference.

Tackling domestic security threats is likely to be at the centre of the campaign ahead of next year's presidential election.

Marine Le Pen, leader of the far right and the strongest challenger to Emmanuel Macron's expected re-election bid, says the president is weak on security and the police need more protection.

"I refuse to accept that attacks against the police become part of daily life. We must at last fight against this barbarity and never, absolutely never, get used to it," Le Pen wrote on Twitter after Friday's attack.