Guns and knives were brandished and champagne bottles became weapons as the 6th Annual Urban Music Awards descended into a bloodbath, witnesses said yesterday.

Last night a 27-year-old man was still in a critical condition after being stabbed at the awards, being held at the O2 arena in east London. Witnesses spoke of "hysteria" and seeing "blood all over the floor" as chairs were sent flying. A 30-year-old man had to be treated for lesser injuries, believed to have been caused by flying glass.

The Saturday night ceremony – at which Estelle, Adele, Leona Lewis, Dizzee Rascal and Duffy were nominated for awards – was cut short as police were called in to quell the chaos.

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Intensify Youth, a project aimed at combating knife crime, was just about to present an award at 10pm, when a fight broke out among around 30 people and other guests were forced to take cover under tables. Yesterday a 21-year-old was in custody at a south London police station after being arrested.

"Our man was just about to go on stage and present the award when this happened," said Mike Muller, 38, adding: "The irony is Intensify Youth is a project that aims to combat knife crimes so this is really disappointing. I was on the table right next to where it happened – it was confusion, hysteria."

The stabbing at the ceremony – celebrating young British artists in the urban music scene – comes at a time of major concern about youth crime.

One guest, Andre Nevling, 24, said a woman from the same table was "covered" in blood. "Obviously the guy who got stabbed must have run past her and she's shaken up. I looked at her and saw blood all over the floor and I was like, 'Jesus, you're covered in it,' " he said.

It is not the first time the awards have been marred by violence. In November 2004, Helen Kelly, 24, an accountant, was leaving the ceremony at the Barbican when she was injured in crossfire between gangs.

Yesterday, Mark Hudson, 28, from London, said: "There's a reputation at these events that people carry knives. But there were no searches. I was worried before I came here."

A spokesman for O2 said they would be reviewing procedures, adding: "We have a full-time, on-site Met Police team alongside our security teams to ensure customer safety, which is paramount. This is the first incident of this nature to have taken place."