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Neighbours in a residential area of Chasse-sur-Rhone, just south of Lyon in France, had alerted emergency services on Friday afternoon after becoming concerned about a strong smell of gas in the area.

Bomb disposal units were sent to the site and authorities quickly set up a 500-metre security zone around a car.

Around 200 people were told to flee their homes in the panic.

More than a dozen gas cyinders were found inside the Peugeot 406 which was parked near homes, with authorities confirming there had been a gas leak.

Police have since arrested the car owner and his wife in connection with what was originally feared to be a "bomb scare".

Jérôme Bourrier, the prosecutor of the Republic of Vienna, confirmed the arrest but said: "As things stand, nothing is of a terrorist nature."

(Image: twitter)

Searches are underway at the couple's home, located between Vienne and Lyon on the banks of the Rhone.

The prosecutor did not want to speak about the "possible motives" and the "reasons why the robbery" was committed.

Cops set up the 500m security zone and “about 200 people were evacuated and taken to the shelter in a gymnasium,” police said.

Florence Gouache, sub-prefect of Vienna, praised an “attentive citizen” who alerted police to the car in a press briefing earlier.

He said the gas cylinders “were not in an immediate explosion situation” and have now been destroyed by robots.

The man arrested, 27, recently worked as a chauffeur in a company transporting gas cylinders, reports said.

Residents within Chasse-sur-Rhône were told to avoid the area for a number of hours as police, miliatry and helicopters were scrambled to the scene as a precaution.

The French town has several factories classified Seveso – sites containing large quantities of dangerous substances – but “they are too far away for there to be a risk,” officials said.