Police believe they have disrupted a Christmas terror plot in the UK, after four men were arrested in Sheffield and Chesterfield.

An army bomb disposal team was called to a Chesterfield property on Tuesday morning (UK time), as connecting streets were cordoned off and nearby homes evacuated.

A 31-year-old man was arrested at the scene, while the three other suspects, aged 22, 36 and 41, were arrested at three separate Sheffield properties.

It was feared the would-be terrorists had already assembled or had the knowhow to construct an explosive device.

The arrests came as part of a joint operation by police and MI5.

All four suspects were detained on suspicion of commission, preparation or instigation of acts of terrorism under section 41 of the Terrorism Act 2000.

The men arrested are being questioned at a police station in West Yorkshire and are suspected of having Islamic State links.

The raids come after recent online threats to UK Christmas markets were shared by suspected IS accounts, showing images of a bloodied knife and a tied-up Santa Claus.

Locals reported hearing “an enormous bang” as the raids took place at approximately 5.30am.

A spokeswoman from Counter Terrorism Policing North East said no explosives were detonated.

“The public may have heard a loud bang at the time as police entered one of the properties, but it was not an explosion,” she said.

“[We] would like to reassure them that it was part of the method to gain entry to the property.”

The UK has been a direct target of terror attacks already this year. In May, 22 people were left dead and 59 were injured when a suicide bomber targeted children at the end of a Ariana Grande concert in Manchester.

MI5 director general Andrew Parker and UK police chiefs have warned in recent months that the current terrorist threat is at an unprecedented level, after 10 plots were believed to have been disrupted since March.