Frightened neighbours thought they had been caught up in a terror alert.

Their exclusive private lane had been sealed off, an inflatable tent blocked the road and police dressed head-to-foot in white boiler suits were crawling all over a luxury bungalow.

The £400,000 detached home with palm trees lining the drive is now thought to be the hub of the most prolific drugs-making operation ever uncovered in Brighton.

For neighbours rising early yesterday to carry their dustbins out to the road the scene which greeted them was like a prelude to armageddon. The private lane was cordoned off by police.

Men dressed in what resembled spacesuits were trying to stay on their feet as they hobbled about awkwardly.

Firefighters in full gear waited on standby while plain-clothed detectives clutching mobile phones huddled together outside.

A mobile inflatable control room filled the width of the lane and on the bungalow's driveway was what looked like a children's paddling pool being used to hose down anyone who had ventured inside.

The businessmen and their wives who inhabit The Vale in Ovingdean are used to being greeted by only the whinneying of horses in meadows which flank their lane. They could only stop and stare.

One said: "It was out of this world. I just couldn't believe what I was seeing.

"At first I thought they must have found a load of terrorists in there."

The property where the drugs factory was found, called Montecillo, is believed to have been rented out by a local businesswoman. She, too, had no idea what was going on.

Locals said it had once been rented by a group who caused umbrage by parking an old German fire engine in the road. But the latest inhabitants had been quiet and polite.

Printing firm boss John Blackman, who lives next door, said: "As far as our family was concerned, they were perfect neighbours. We hardly heard a peep from them.

"But there was a lot of strange activity, such as mattresses being carried out of vehicles in the early hours.

"We thought they were doing good works in the centre of Brighton, maybe running a soup kitchen."

Mr Blackman, the son of a former mayor of Brighton John Blackman, said: "I am astounded at what was found. We certainly never smelt anything or got a whiff that made us high while working in our garden."

Another neighbour, businessman Colin Ancell, said: "We are all surprised. You never know what goes on behind the curtains in this road.

"There were some peculiar vehicles parked outside by former tenants, including an old German fire engine which I believed they used to travel to pop festivals."

Brighton and Hove councillor Lynda Hyde, who saw the raid while walking her dog, said: "I am shocked such a substantial quantity of drugs has been found in Ovingdean, particularly so close to a secondary school."

One man who rented the bungalow was in custody today.

The detective who arrested him in a Brighton bar on Wednesday night later had to strip and be hosed down in case he had been contaminated with chemical residue. Police and fire chiefs took the issue seriously. Too much contact with what are potentially deadly chemicals can cause brain damage.

In a room at the rear of the bungalow they found a fully-fitted laboratory packed with chemicals used for "cooking" LSD, ecstasy and amphetamines.

East Sussex Fire Brigade's specialist chemical unit, based in Eastbourne, was on hand to assist with decontaminating search police. Wearing gas masks and full body suits the police spent all day going into the lab for brief spells to retrieve evidence.

John Ticehurst, fire brigade divisional officer, said: "There were inflammable and other potentially dangerous chemicals inside but there was no danger to the public."

The bungalow lies a stone's throw from Longhill School and children approached police standing by Road Closed signs.

Two young boys asked an officer: "What's going on?"

The officer told them it was a search and there was nothing to worry about.

Rumours of "someone being knifed" were spreading among youngsters and police paid a visit to Longhill to reassure staff and students.

Detective Chief Superintendent Graham Cox was concerned people watching the scene might think it was linked to some sort of terrorist incident.

He said: "It was understandable but we stressed to everyone they had nothing to fear."