Armed police were called to the centre of Brighton when a gang was seen with what turned out to be a replica gun.

The incident happened as the Government announced tough new measures to curb imitation weapons.

Suspects from Tuesday night's gun scare were traced to an address close to Richmond Terrace, where they had been seen.

Two replica handguns were seized and a man and a woman were arrested. A police spokeswoman said: "We are still trying to get to the bottom of this incident and we would appeal to witnesses to come forward."

She warned anyone carrying ball bearing or replica guns could be met by officers with real guns and added: "It is an offence to carry them in public so don't let these realistic-looking replicas leave your home."

Ian Tinlin, chairman of the Albion Hill Residents Association, said: "We need a greater police presence around here."

Police have said they would be monitoring the area.

Sergeant Steve Warner of Brighton CID said: "This type of incident is extremely rare in the city and we will treat any reports of potential misuse of firearms very seriously."

Anyone with information should contact Sgt Warner on 0845 6070999.

Meanwhile, plans to ban the manufacture, import and sale of most kinds of replica guns have been outlined by the Government and have been included in the Violent Crime Reduction Bill.

Last year there was a 66 per cent rise in offences involving replica firearms. Some of the guns fire blanks and others can be converted to fire live rounds.

Police say it is often almost impossible to tell the difference between a real gun and a replica.

The legislation would mean stiffer sentences for carrying imitation guns, and tougher manufacturing standards to make sure replicas cannot be converted to fire real ammunition.

The Bill will also crackdown on knives by increasing the age limit for buying them from 16 to 18. There will also be powers for headteachers to search those they suspect of carrying knives.

Binge drinking-related disorder will also be addressed.

The proposals are part of the Government's attempts to restore "respect" in communities, town centres, and schools, which it says is among its top priorities.