Police were guarding a severely-damaged Tesco Express store in Bristol as local residents complained that heavy-handed tactics had provoked a night of violent rioting.

A tense atmosphere persisted in the Stokes Croft area of the city after a raid on a squat occupied by opponents of the newly opened supermarket outlet left eight police officers and several protesters injured.

More than 160 officers in riot gear, reinforcements from neighbouring forces and officers on horseback were involved in the operation, which began shortly after 9pm. Four people have been arrested, Avon and Somerset police said, because they posed "a real threat to the local community" in Stokes Croft.

Reports had been received that petrol bombs were being assembled in the squat – known locally as Telepathic Heights – for, it was alleged, an attack on the Tesco store. The force confirmed that petrol bombs had been recovered from the house and were being examined.

"There have been several significant incidents in this building during the past few days, which have caused serious concerns to police and local residents," Superintendent Ian Wylie said.

"The safety of the public is paramount in a situation of this kind and we took the decision to carry out a robust and swift operation, following intelligence received about the criminal intentions of those who were occupying the building."

Officers secured the area on a warm night as locals were heading off to bars and clubs at the start of the Easter holiday. A rumour went round that police were evicting the squatters. Clashes began when lines of officers closed off Cheltenham Road, a main route into the city centre, and protesters began throwing bottles at them.

The disturbances continued through the evening to 4am on Friday. At one stage an abandoned Wiltshire police car had its windows smashed and doors ripped off, a scene captured on a YouTube video.

The origins of the confrontation lie in objections to the opening of the new Tesco store on Cheltenham Road; the shop was severely damaged in the riot. The area is close to the St Paul's area, where the first Thatcher era, inner-city riots erupted in 1980.

Assistant Chief Constable Rod Hansen said: "When 300 people congregated and a small minority from that group started small fires and throwing bottles, stones and other items at officers, we used well-rehearsed plans which involved the use of officers from neighbouring forces to control what had become a volatile situation." None of the injuries are believed to be serious.

Kerry McCarthy, the Labour MP for Bristol East, was on the scene later in the evening. The disturbances were just outside her constituency. "It's a very hippyish, counter-culture type of area with lots of arts shops," she said. A Banksy artwork decorates one wall.

"One group were laying their bicycles down on the street and most of it seemed fairly good-natured but the police response was heavy-handed.

"There were two people playing saxophones on top of a bus shelter and a photographer was taking pictures. A police officer walked across and pushed him over; there was no reason to do it. My colleague Ben Mosley [a Labour council candidate] was hit by a truncheon and I was shoved out of the way by a policeman at one stage.

"I had a conversation with the chief constable. It seems the police had received reports that petrol bombs were being carried in and out [of the squat].

"It was anti-establishment protest: against capitalism and corporations, similar to what we saw in the march against the cuts in London where Starbucks and banks were targeted."

Duncan Birmingham, an arts lecturer who lives nearby, told the Guardian he had seen lines of police in riot gear. "There were people going to nightclubs, dressed up in party gear, mingling with police horses and police vans from Wales," he said. "One crowd had put rubbish bins across the road and were throwing bottles.

"Tesco has been trashed. The windows have been put in and there's paint everywhere. There's been massive opposition to Tesco opening. The store had been hidden behind hoardings until it opened last week. There's another Tesco about half a mile away in each direction."

Clare Milne, who lives nearby, said she had not been told why there was a police raid on the squatted building. She said she witnessed from her bedroom window an unprovoked attack on a man walking along the street with a woman. "An officer whacked him around the lower back with a baton."

Another witness, Nick Jones, a primary school teacher, said that groups from other parts of Bristol joined in. "It turned into a running battle up and down the street for two hours. Between 2.30am and 4.30am there were bottles thrown and rocks. I saw a police officer get hit in the face and go down – he was taken away in an ambulance.

"People had weapons. They had saws and shields themselves. It turned from interesting to scary very quickly."

Lewis Clapham, 22, a customer services worker, said: "I wasn't involved in the protest or the squat. I just happened to be down there and I went up to the police and said I was just passing through, but one of them came and hit me really hard with a baton. I've got bruising all down my side now with massive swelling on my elbow."

Asked about allegations of officers hitting those not involved in the violence, a spokesman for Avon and Somerset police said: "The whole operation will be reviewed by the force. Each complaint made to the police is thoroughly investigated."

Public spaces, Bristol and the riot

"Banksy and Massive Attack didn't come out of nowhere – there's a reason why they are from Bristol," says sociologist and Bristolian David Goldblatt. He believes the latest riot is part of a larger history of the public taking over open spaces in the city, which dates back 700 years to the St James's fair.

The fair, held on free ground close to Stokes Croft, attracted people from all over Europe but was banned in 1837 after the drinking, gambling, bear baiting and prostitution became too much for the local aldermen.

In 1831, three days of rioting erupted in Queen's Square after the House of Lords rejected voting reform and in 1909 suffragette Theresa Garnett attacked Winston Churchill with a riding crop at Bristol Temple Meads station, shouting: "Take that in the name of the insulted women of England!" More recently, riots exploded over racial tensions in the neighbourhood of St Pauls in 1980. Shiv Malik