Khan attacked five people, including the graduates, armed with two kitchen knives and wearing a fake suicide vest before he was tackled by members of the public on London Bridge and then shot dead by police at point-blank range.
Mr Crilly, who sprayed the London Bridge terrorist with a fire extinguisher, was a convicted killer and a close friend of Mr Merritt.
Ms Trayers gave the account she said her former partner told their son.
“They were at the meeting and they noticed the terrorist had gone missing. They couldn’t continue without him so they went to find him", she said.
“Jack has gone into the toilet, that’s when he’s claimed his first victim and stabbed Jack. He must have been strapping himself up.
“The terrorist was wearing a big bubble jacket and wouldn’t take it off. Khan was very quiet and didn’t say much and when he’s come out of the toilet that’s when he’s said he was going to blow the building up. They started throwing chairs at him and that’s when he stabbed his second victim.
“They chased him out of the building then.”
Mr Crilly had served 13 years in prison after being convicted of murdering 71-year-old Augustine Maduemezia, but his conviction was quashed after a Supreme Court ruling and he was released in 2018.
The court said the joint enterprise law, where defendants were prosecuted for murder even if they did not strike the fatal blow, had been misinterpreted.
He met Mr Merritt while in prison, where the graduate from Cottenham, Cambridgeshire, was a course co-ordinator for the Learning Together programme.
The 48-year-old studied for an Open University law degree while in prison and graduated this year.
Speaking after his release last year, Mr Crilly said: "I had a bad life, I've changed it, I wasn't guilty of murder.
"I totally accept what I did and it was wrong ... I would have done the time, I would have done every day of that."