For three hours a mysterious cloud of acrid smoke hovered over some of London’s busiest streets. As shoppers ran coughing and spluttering for cover, police sealed off three roads and evacuated homes and businesses in the heart of Soho, fearing a chemical attack or a dangerous toxic leak.

As the ambulance service sent in its Hazardous Area Response Team Unit, firefighters wearing specialist breathing apparatus entered the deserted streets to seek out the source.

Soon after 7pm on Monday they emerged from the smoke carrying a huge cooking pot containing about 9lb of smouldering dried chillies.

The firefighters had smashed down the door of the Thai Cottage restaurant in D’Arblay Street and seized the extra-hot bird’s eye chillies which had been left dry-frying. They were being prepared as part of a six-month batch of nam prik pao, a super-hot Thai dip to accompany prawn crackers.

Thai staff at the restaurant, who are used to the smell of the sauce being prepared, were baffled initially by the commotion. Chalemchai Tangjariyapoon, the chef, said: “I was making a spicy dip with extra-hot chillies that are deliberately burnt. To us it smells like burnt chilli and it is slightly unusual. I can understand why people who weren’t Thai would not know what it was. But it doesn’t smell like chemicals. I’m a bit confused.”