The gangland feud that killed two unarmed police officers and a father and son is threatening the lives of dozens of other men, women and children, the chief constable of Greater Manchester has warned.

Sir Peter Fahy spoke as parts of one of Britain's biggest cities were under the grip of 24-hour armed police patrols after the murder of constables Nicola Hughes, 23, and Fiona Bone, 32, in the worst killings of police officers for five decades.

On Wednesday a 28-year-old man was arrested on suspicion of conspiracy to murder the two PCs. Dale Cregan, 29, who was the subject of a five-week manhunt before handing himself in an hour after the killings, was still being questioned on Wednesday on suspicion of their murders and those of David and Mark Short.

Fahy revealed that dozens of people in and around Manchester have been issued with Osman warnings – detailing threats to their life – as a result of the vicious feud between two crime families which escalated dramatically on Tuesday with the murders of two of his officers in an apparent ambush.

Grenades of the kind used in the fatal attack on Hughes and Bone on the Hattersley estate in Mottram were still in the hands of criminals, the chief constable said, and there were growing fears about public safety.

"We are not confident that we have recovered all of the grenades and the threat is still there," he said. "I would want that to be the message.

"This has been a longstanding criminal feud between different outfits and the threat is very much there."

Fragments of the grenade used to kill the police officers were still at the crime scene – a house in Abbey Gardens on the Hattersley estate – on Wednesday. The firearm used in the fatal shootings has been recovered, Fahy said.

On Tuesday morning the two female police officers were sent to part of the estate, unarmed and without backup, to respond to a burglary report where they were killed in a gun and grenade attack.

Fahy defended the decision to put Cregan on police bail in June following his arrest on suspicion of the murder of Mark Short in May. Short was killed in Droylsden, east Manchester in the early hours of the morning by a masked gunman carrying a semi automatic pistol.

Cregan was questioned but released while inquiries continued. Two months later Short's father, David, 46, was murdered a mile away in a grenade and gun attack at his home.

His death sparked an unprecedented manhunt by Greater Manchester police, who named Cregan as a suspect. His picture was beamed onto screens at football matches, and officers carried out 50 armed raids – including on the Hattersley estate – in their failed hunt.

Police were patrolling the Droylsden and Clayton areas of east Manchester as flashes of violence continued on Wednesday, with gunshots fired in the area.

• This article was amended on 20 September 2012. The original sited Droylsden and Clayton in north, rather than east Manchester. This has been corrected.