Anti-terrorism police arrested a woman during an operation at a house in Bradford.

The 32-year-old was taken away and questioned by officers from the Leeds-based Counter Terrorism Unit about alleged money laundering.

She was held under the Proceeds of Crime Act and released on bail pending further inquiries early today.

Neighbours have spoken of their shock at seeing unmarked police cars swoop on the modern terraced house in Colston Close in the Daisy Hill area of the city yesterday.

The drama began to unfold shortly before 7.30am when officers entered the property with a forensic team.

A spokesman for the CTU said: “We arrested a 32-year-old woman on suspicion of money laundering offences. She has been detained in custody for questioning.”

One neighbour, who did not want to be named, said the family from the house had lived “quietly” in the street for about ten years.

She said the woman who was led away was one of two daughters.

The neighbour said: “Dad is a taxi driver in Leeds and the mother is friendly, she waves and says hello.

“There are two daughters, one married with children who come to visit a lot and then there is the other one who the police took.

“She comes and goes a bit. I thought she got married last year.”

Another neighbour said: “The girl they took away used to come and go to London a lot. I think she was working for social services fostering children out or something like that. I can’t imagine her being in trouble.”

And another resident said: “Everyone is worried what’s happened is something to do with terrorism. If it is, it’s a shock. We would never have suspected anything like that going on – this is usually such a quiet place to live.”

One witness said of the raid: “There was lots of comings and goings. People wearing blue gloves who must have been forensics, bringing out papers and taking them away – and they were going in with big cameras.”

Plain-clothes officers were also searching a red Honda car parked close to the house and were seen sifting through papers found inside it.

The Counter Terrorism Unit was set up in April 2007 to gather evidence and intelligence and to help prevent and disrupt terrorist activities.

The five key areas of Counter Terrorism work are international counter terrorism, Irish-related terrorism, domestic extremism, counter proliferation and espionage.

e-mail: kathie.griffiths @telegraphandargus.co.uk