UPDATED 9.14PM:  Children have been reunited with their parents after a hunt for an armed man in Palmerston North.

MORE: Man who who caused lock down of Palmerston North schools named

Loud bangs were heard this afternoon when armed police stormed a house as they searched for the fleeing offender.

A police spokewoman has confirmed that all children from Cloverlea Primary School and Cloverlea Kindergarten have been safely evacuated by bus.

An NZME journalist at the scene reported that children at Cloverlea School and Cloverlea Kindergarten were "loaded onto two big white coaches driven by police and the armed offenders squad".

The first coach managed to drop one bus load of kindy kids to the Highbury Whanau Centre.

The armed offenders squad had to re-access the safety of bringing the next bus load of children in.

Police advised all parents and caregivers of children from Cloverlea Primary School and Cloverlea Kindergarten to go to the Highbury Whanau Centre on Highbury Road to be re-united with their children.

Police pulled everyone into the Highbury Whanau Centre hall and said they are "doing their best to resolve the incident, but it's not clear when that will be".

The NZME journalist also reported that they had been told "arranging alternative sleeping arrangements wouldn't be a bad idea...It could be a long night".

An update on Ruahine Kindergarten's Facebook page said: "Cloverlea Kindergarten update - the team are keeping your children calm and feeding them with toast, so far they think that they are inside due to bad weather and they're happy. The Highbury Whanau Centre is being staffed by the police, if you live OUTSIDE the cordon area, please go there with any queries or concerns. If you live inside the cordon, please stay at home. Police have advised that if anyone does get through the cordon, they will not be allowed out until the incident is over."

Police say they're doing their best to resolve the incident, but it's not clear when that will happen.

Police are searching houses on Geraldine Cres.

They are also ringing each house and asking how many people are inside the house and if there are any animals, according to a Geraldine Cres resident.

Residents have become frustrated. More than 100 people are standing in the carpark of Cloverlea Tavern, but police are letting no one enter the cordoned area.

"You can get out but you can't get in," the NZME journalist reported.

One resident had just had their house searched.

She commented that the police said "we know where he is, but we can't pinpoint him".

EARLIER

Schools and a kindergarten in Palmerston North remain in lock-down as armed police hunt for a fleeing offender.

A spokeswoman from Somerset Crescent School said the school was "technically still in lock down, but kids are being released if they're accompanied by a parent".

Cloverlea School confirmed that they remained in lock down and were waiting for police instruction. Kids were not able to leave the school grounds.

Police are still at cordons in the area and road blocks are in place while police are in regular contact with the school. 

Any parents of pupils at Cloverlea Primary School or Cloverlea Kindergarten who have concerns or questions about the incident can speak with police staff at the Highbury Whanau Centre on Highbury Ave, police said.

The armed offenders squad and police dogs have returned outside address of interest.

Spikes have been removed from road on Peters Ave and Herbert Ave.

Police are still parked outside the dairy, an NZME journalist at the scene said.

"One policeman I can see on the corner with a gun on the corner of Peters Ave,” she said.

"At 3.50pm I could hear the police yelling 'put your hands up ... It's a property between Tararua Terrace and Fox Place."

The police are still speaking to people behind the dairy who have "been there the whole time".

Earlier today loud bangs had been heard after armed police stormed a house as they hunt for a man in Palmerston North.

He fled from police in a grey Mazda car after police attempted to stop him just before 11am this morning.

Nearby primary school, Somerset Crescent School, has been placed in lockdown while they hunt for the wanted man.

Cloverlea School confirmed they were in lock down: "We’re following instruction from police and that’s all we know so far. The kids are safe, the teachers are safe, and we’re just following procedure."

A helicopter has returned to the area and is hovering above Benmore Avenue.  

An ambulance is also on the scene parked on Gillespies Line, near the train tracks.