A number of controlled explosions have been carried out at a flat in Newhall near Derbyshire where "potentially volatile" substances were found, police said.
A 55-year-old man remains in custody and up to 200 people have been evacuated since the discovery yesterday.
Homes within 100 yards of Belvoir Crescent were evacuated and police said they were working with the county council, police and voluntary groups to house the displaced residents.
Superintendent Paul Callum, who is in charge of the incident, said: "The safety of the public is paramount in these situations.
"We apologise for any inconvenience to the evacuees. We will let them return to their homes as soon as we can be sure the area is safe."
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