THREE men were last night being questioned by police under the Terrorism Act after a raid on a Blackwood house.

They were arrested on suspicion of the commission, preparation or instigation of acts of terrorism.

Police found three bottles of an unidentified substance in a shed in the back garden of a house on Waunllwyn Crescent during the raid on Wednesday.

The three men, aged 24, 41 and 24, were initially arrested on suspicion of drug offences by Gwent Police, but the Metropolitan Police Service’s Counter Terrorism Command took over the inquiry on Thursday and transferred them to a central London police station.

Neighbours yesterday spoke of their shock at the arrests.

Laura Lemka said: "I can’t believe it, you don’t expect something like this to happen on your doorstep."

Matthew Birchard, 25, who lives next door to the raided house, got caught up in the raid when he was walking up to his front door with his wife, Carys, 26, and 14-week-old baby Iolo.

He said three police cars with sirens on tore up the road and officers jumped out.

One officer ran to his door and started hitting, shattering the glass of a window beside the door.

"It was surreal, I couldn’t believe what was happening," he said.

"But then he realised he had got the wrong house and they rammed the door down next door and went in shouting."

Around ten minutes later he saw two men being taken away in a police riot van.

"You don't expect this to happen so close to home and it's worrying because we've got such a young baby," Mr Birchard said.

Gwent Police have confirmed that Mr Birchard's house was mistakenly targetted but have apologised for the incident and made sure the house was secured before leaving.

Other neighbours saw a forensic team combing the house and garden on Wednesday, taking clear plastic bags in and bringing things out in cardboard boxes.

They said the men had lived there for around two years and people were always coming and going from the house.

One neighbour said police told her to keep her doors and windows closed because a "nasty" substance had been found in a shed and had leaked.

Specialists from the fire service were called in to help police identify and remove the substance.

Police continued to search the house and another Gwent home linked to the arrests yesterday.

A spokesman for the Metropolitan Police said the inquiry is not linked to international terrorism.

The men are no longer facing drugs charges.