The heart of Coventry was a ghost town last night after the city centre was evacuated when workmen unearthed an unexploded Second World War bomb.

People unable to return home sheltered at rest centres set up by the city council, while bomb disposal experts continued to assess the situation.

The 18-inch torpedo-shaped explosive was found by contractors carrying out routine excavation work on the site of the £130 million Belgrade Plaza development at about 11.30am.

Police set up a 500 metre exclusion zone around the site in Upper Well Street, behind the city's Belgrade Theatre, evacuating workers, shoppers and local residents.

By 5pm the ring road was closed anti-clockwise between junctions 1 and 8, effectively sealing off the city centre.

Paul Marlow, site manager for Deeley Construction at Belgrade Plaza - which is planned to include two hotels, a casino, restaurants and apartments - said the bomb was discovered during a routine excavation of a water main on the site.

"We discovered an 18-inch device which we believed to be explosive", he said. "We immediately enforced our health and safety procedure by evacuating the construction site and informed the police, who have now taken control of the site."

Shoppers were ushered out of Millennium Place, West Orchards shopping centre, Broadgate and the city's flagship Primark store.

Queen's Road Baptist Church, St Peter's Church, and Bablake School were taken over by British Red Cross volunteers.

The Explosives Ordinance Division (EOD) was called in from Aldershot, Surrey, to examine the bomb, and a second team from Cambridge arrived shortly after 6pm to assist.

Initially police said the evacuation was a "precautionary measure" and the bomb could be "as harmless as a kitten".

A West Midlands Police spokesman said: "A preliminary examination by the EOD has confirmed that the device is apparently genuine but it is not clear at this stage whether it is live.

"With public safety the paramount concern for the emergency services, a 500 metre cordon has been set up from Bond Street in the city centre with pedestrians and traffic being excluded from this zone."

Bridget Chambers, leading the Red Cross team, said: "We've been deployed at the request of Coventry City Council Emergency Planning Unit.

"The first evacuees started arriving just before 2pm and we'll be here for as long as we're needed, until the last person is able to return to their home.

"There are about 70 residents here at the moment, many elderly and there's a great community spirit here as memories come flooding back from being evacuated during the Second World War."

* Irony as bomb stops play

Alan Pollock's play One Night in November, about the wartime bombing of Coventry, opened in the Belgrade's new second theatre, B2, earlier this week and has completely sold out for its three-week run.

Speaking yesterday about the bomb alert, Belgrade Theatre press officer Ray Clenshaw said: "We first heard about this at about mid-day. They kept pushing people further and further back and eventually the whole of the city centre was evacuated."

He added that because the show was completely sold out it would be impossible to offer alternative tickets for people who had booked for last night's performance. They should contact the box office for a refund.

Alan Pollock, writer of One Night in November, said: "It's irony upon irony - I thought they were joking at first. I can't help feeling there's some malice at work here. Perhaps some outraged spirit somewhere has decided to take revenge on me."