Police have arrested a man under the Prevention of Terrorism Act after the discovery of a live grenade forced the evacuation of part of Gatwick Airport today.

Home Secretary David Blunkett confirmed this afternoon that a hand grenade had been found in the North Terminal, sparking a major security alert.

Thousands of people had to leave the terminal and flights were grounded after the discovery of a suspicious device.

Security staff cleared the building at 2pm and all flights from the North Terminal were grounded until further notice.

Incoming flights not already in holding patterns were diverted to other airports. The South Terminal was not thought to have been seriously affected.

The arrested man was a newly-arrived 37-year-old Venezuelan national. He was taken to a central London police station for questioning following a search of his luggage.

A Sussex Police spokesman said at 4.30pm: "We can confirm that we are currently dealing with a security issue at Gatwick Airport, where a man has been arrested under the Prevention of Terrorism Act.

"This has resulted in part of the North Terminal being closed.

"We are working closely with Gatwick Airport Ltd and other airport agencies to resolve this issue as quickly as possible. There may be some disruption to roads around the airport at this time."

Earlier today, two men were arrested near Heathrow Airport under the Prevention of Terrorism Act. Police said it was a "precautionary measure".

About 2,000 people were involved in the evacuation, which came hours after shadow home secretary Francis Maude raised fears of the airport being a "soft target" for terrorists.

Passengers, many with small children and luggage trolleys, were shepherded to Le Meridien Hotel, connected to the North Terminal.

Most were bewildered and all would almost certainly have missed their flights.

The Sussex Police spokesman said: "Every so often something happens to trigger a security alert. We are following fairly standard plans and procedures."

Kim Fowle, who works at the Sunglass Hut in the North Terminal, said: "A manager told me that police had found a live hand grenade but nobody knows for sure what has happened.

"There was no tannoy announcement. The police just started moving people out of the terminal and there was a bit of a panic."

Her friend Fiona Ritchie said: "We saw women with push-chairs and their husbands pushing trolleys running as fast as they could."

Hundreds of people congregated on roadways and ramps outside the terminal building.

They were being marshalled by airport staff wearing fluorescent tabards who stayed in walkie-talkie contact with the operations centre.

Claudia Lama, a 34-year-old Chilean tourist, was about to board her flight home when the alarm was raised.

She said: "I am trapped here and we have not been able to find out whether we will be flying today or not."

Her friend Consuela Moyano said: "I was supposed to go to Heathrow on a bus from the North Terminal but they are not running either."

Armed police with sniffer dogs were covering every inch of the terminal and their colleagues drafted in traffic wardens to help seal the airport perimeter road.

All traffic to the terminal was being turned away. Cars were pouring out of the main car park as terrified tourists made a getaway.

Simon Cook, general manager of Le Meridien, said his staff had opened up every available area for the evacuees.

He said: "We have 300 passengers and their luggage in the hotel. We are very busy, otherwise we would have been able to take more people in."

He added: "People are philosphical about what has happened."

At 4.45pm bomb disposal experts were preparing to carry out a controlled explosion within the terminal building.

Report by Tony Harris, news@theargus.co.uk