The collision occurred at 8.22am. A three-coach train on the east coast mainline hit a trailer being pulled by a tractor. Two of the coaches careered off the tracks, one landing on its side, the other ending up titled at a crazy angle on an embankment. We got there minutes after the impact to see smoke and hear the cries of the passengers in the one carriage still left on the tracks. The passengers in the other two carriages were too traumatised to make much noise.

Until 8.22 it was an ordinary Tuesday morning in rural Lincolnshire. The big sky was slate grey and threatening rain; the rapeseed fields around the crash site swayed in the breeze. The one discordant note was struck by the Classic Cuisine van (hot dogs and burgers £3.80) parked in a field next to the crash site. A couple of hours later the van would be surrounded by hundreds of exhausted emergency staff as they tried to cope with Lincolnshire's biggest ever rail disaster.

Or should that be pseudo-disaster? A train had been derailed, and half an hour after the crash, in a bizarre secondary accident, a lorry looking for a way out of the traffic jam caused by the derailment hit a school, killing and injuring dozens of children and causing a chemical spill that threatened the village ("It's like Casualty," says one observer). But while the police, the fire and ambulance crews, the voluntary agencies, the rescue helicopters that descended on the scene were playing it for real, none of it is real. It's an exercise designed to test how the emergency services would react to a multiple catastrophe.

Lincolnshire takes these exercises very seriously. Every county has to have a disaster plan and to test disaster planning, but most do it using models. Lincolnshire, which two years ago simulated a coastal flood, does it for real – or as real as they can make it. "We have a good track record for realistic exercises," says David Powell, head of the joint emergency management service, who has been planning this week's disaster for nine months. "You test an awful lot more when the blue lights have to turn up, and suddenly they have to talk to each other."

Powell says only a real-time exercise can test the "buggeration" factors – unpredictable elements that no tabletop simulation can anticipate. This one, codenamed Exercise Georgiana (named after a woman killed in a rail disaster in Grantham in 1906), will involve more than a thousand people and last for three days.

The degree of realism is tempered by the fact that all the agencies know what is going to happen and when, though some of the finer details are left sketchy, and Powell reserves the right to introduce "injects", rogue elements he hasn't briefed the participants about. There are also the buggeration factors that no one can anticipate, such as the suspect package found near the school that causes the exercise to be suspended for 10 minutes just in case a real-life explosion is about to occur.

The disaster occurs at a training facility next to RAF Waddington a few miles south of Lincoln – the sort of place where you can crash a train without too many members of the public tweeting about it – but the real site Powell and his planners have in mind is Claypole, a village 15 miles away, which is on the east coast mainline and has a level crossing. The residents have been told their village is about to have disaster visited on it, and many have volunteered to play the part of walking wounded and distressed relatives at a survivor centre that, within a couple of hours of the train crash, will be improvised in the village hall.

The first thing that strikes you at the scene of the crash is how long it takes to get people out of the carriages, even the one that's upright. "There are people dying in here," one of the injured shouts through the window. But still the initial wave of emergency personnel stand around assessing the situation, deciding on a plan of action, establishing priorities. "Health and safety gone mad," wails the Guardian photographer, who looks like he's about to go in alone. He becomes apoplectic when the police start putting tape around the accident scene before getting the injured off the train. I start to fear there could be a real disaster.

Tony Rouse, one of the umpires for the exercise, points out that the power is still on, and the overhead power lines are probably on the ground – any crews trying to effect a rescue would be in danger of electrocution. "If you start losing paramedics, you exacerbate the situation," he says. "It's pointless them being casualties themselves. The whole operation would grind to a halt." He says it could be up to an hour before the casualties are treated. Don't they become hysterical? Surely the people on the train must be baffled by what's going on? "There is conflict," admits Spencer Creek, technical response manager for Lincolnshire fire and rescue, "and that conflict creates problems for responders and casualties. We have to measure the risk, and the risk mustn't outweigh what we're trying to achieve."

Some of the local people who have volunteered to be injured for the day are impressively stroppy about the long delay in providing treatment. "There's a guy in here who can't breathe," shouts one. "Can't one of you blokes who's standing around doing nothing come and help?" Others, though, are less realistic. Staying in character for hours is difficult. Sometimes these exercises are done with trained actors or volunteers who have role-play experience. Powell says that for this exercise they mostly preferred to use local people, including a group of local volunteer first responders, as a way of engaging the community. But I suspect there may also have been cost factors – this is a cheap way of getting bodies – and can't help thinking greater verisimilitude, more hysteria, a greater sense of panic would test the emergency services more.

I feel that even more strongly when I see Georgina Minter playing her role. Minter is one of the dozen or so pros that Lincolnshire has shelled out money on today – all members of Amputees in Action, men and women who have lost limbs and now make themselves available for simulations such as this. They have been made up so their severed limbs look ultra-realistic. Add Minter's Oscar-winning performance as a woman outside the school that has been hit by a lorry – "Where's my baby?" she keeps screaming to a paramedic who looks increasingly shellshocked and who eventually says, "Let's get her out of here, no niceties with this one" – and the test takes on a new dimension. Minter, who four years ago lost both her legs and a hand to necrotising fasciitis, suddenly makes you feel this is more than just a dry run.

"Our role is to rattle the emergency services out of their training mode, put them off a little bit and make them think outside the box," says Karl Ives, Amputees in Action's supervisor for the day: "We want to put a bit of stress on them."

"We're also desensitising them for when it happens for real," adds Lyndsay Adams, an amputee who starred in the Paralympic opening and closing ceremonies and who is today playing the headteacher of the school devastated by the chemical tanker. "They won't have seen it in real life, but this is as real as we can make it."

Dr Peter Holden, a GP who is working here today as a medical incident adviser, has attended three real-life disasters: Hillsborough, the bomb in Tavistock Square on 7/7, and the house explosion in Newark last Sunday. He accepts a test such as this can never quite mimic the real thing – "If this was real, you'd be looking at real blood," he says simply – but reckons the management challenges are the same. "What this does for those who've never really had to do it is make them realise that the first hour is utter chaos, the second hour is organised chaos, and the third hour you begin to go in the right direction."

Holden's role is to prioritise casualties. The paramedics bring them to him with their assessment, and in the space of about 30 seconds he then has to classify them as priority one, two or three. Priority one go straight to hospital; the rest, even those with bloodied faces and broken bones, will have to wait. The people who were getting stroppy on the train two hours ago are now getting stroppy all over again, wondering why they've been parked in a field. A group of boys from Newark College are shivering under blankets after being decontaminated following the chemical spill. One says his nose has been bleeding (in theory, you understand) for two hours. "I'm going to die of a nose bleed," he moans.

"The hard thing for all clinical staff is that in a major incident, you turn everything on its head," explains Holden. "You are doing the most for the most. You can't get stuck in on the first person on the scene. What we've got here is a large number of casualties, many with very serious, life-threatening injuries, who have been stabilised, resuscitated and now have to be shipped out. But we also have all these other people with quite significant injuries who are less serious, and our job there is to stabilise them and feed them into the medical chain so that the medical chain doesn't get indigestion. You will notice that I've ruthlessly kept the walking wounded here. The priority one people will die within minutes, whereas they will take days." You will not die of a nosebleed in two days. The young lad should be fine until at least the weekend.

Over at Claypole, the survivor reception centre is in full swing. The Red Cross is registering the walking wounded and the traumatised as they are brought in and offering first aid. Reassuring women from the Royal Voluntary Service are serving tea and custard creams – the essence of English stiff-upper-lipped fortitude. Local resident Claire Simmonds is playing a woman who believes her elderly parents were on the train and is giving the man from the rail company a hard time over the lack of information she is receiving. Mike Freeman, a volunteer with the Lincolnshire Chaplaincy Scheme, is offering support and trying to keep her calm.

Bang! Mark Bedford, playing a diabetic who was on the train and has lost his insulin, faints, falls off his chair and hits the floor with a resounding thud. If Minter takes the best actress award, Bedford must get best actor. This is one of several identities Bedford was issued with when he reported for volunteer duty. In the morning he had been Mr Disruptive. "We were putting pressure on people really," he says. "It was entertaining. There was a lady from Germany who couldn't speak English. I had the idea of using Google translate to help her."

He says for the most part it worked, but did at one point translate "Where is my brother?" as "Do you need your bathroom repairing?"

Meanwhile, in Lincoln, a strategic command centre has been established in a former nuclear bunker at the county's fire and rescue HQ. There are three levels in the command chain: bronze command – the emergency services on the ground; silver command – a large room at the bunker filled with "cells" dealing with big-picture issues such as logistics, the environment and the media; and gold command, where strategic policy is laid down by 40-plus key people from the 20 or so agencies dealing with the disaster.

I attend the three o'clock meeting, chaired by Chief Inspector Paul Gibson, where they assess how the casualties are being treated, whether Claypole should be evacuated because of the chemical spill, how they will cope with the chaos at local stations (the east coast main line is closed and they are expecting agitated commuters to fight to get on to buses), and when casualty figures should be released. Karen Spencer, the council's strategic communications manager, is desperate to get some figures out – Twitter, like nature, abhors a vacuum and will not be slow to guesstimate figures, she argues – but Gibson is reluctant until they are verified. Their standoff adds a nice moment of drama.

Spencer tells me after the meeting that emergency personnel have to realise the social media revolution has changed the nature of disaster management. "There are so many members of the public with smartphones that people will be tweeting photographs and information immediately," she says. "We are hours and hours late in response. I can only say it so many times."

There are tensions between competing parts of the emergency jigsaw: the police are cautious and inherently hierarchical; the council is more used to collective decision-making; its media staff are inclined to be as open as they can in releasing information. Simon Burgess, the council's strategic communications officer, says a key part of the exercise is to highlight these tensions. "No one should be worried about failing," he says. "That's what it's all about – identifying problems. Everything is recorded; everything is minuted; and in the end, in about two weeks' time, we'll be looking at everything – what worked, what didn't work."

By late afternoon, a press statement has been released saying eight people have been killed (I've been tipped off the number of dead will more than double on succeeding days); the police are advising people to "stay calm"; the fire service spokesman clunkily refers to a "protracted ongoing incident". Back at Waddington, the casualties have been freed from the train and the wrecked school, the stroppy walking wounded and the young man with the nosebleed have gone home, and an eerie silence has descended. Two bigwigs from gold command assessing the situation after day one – day two will see the start of the search for the body parts scattered across the site – look content. Given the scale of the catastrophe, it hasn't been a complete disaster.

• This article was amended on 23 May 2013 to remove part of a quote that the speaker believed was not directed to the writer of the article.