The booming sounds were first heard at around 10pm and continued for more than an hour, from the area of Heysham Port and the site of Heysham Nuclear Power Station.
Bangs could even be heard 7 miles away in Lancaster, and prompted a flood of calls to police from people reporting 'gunshots' and 'explosions'.
Residents living close to EDF-operated Heysham Nuclear Power Station became so concerned that Lancashire Police were forced to release a statement to calm people's fears.
At 11pm, a police spokesman said: "We are receiving a high number of calls regarding 'gunshot' sounds coming from the area of Heysham Port and the Power Station, these sounds can be heard across Heysham and Morecambe.
"We can confirm that this is nothing to worry about.
"The repeated loud bangs similar to gunshots are part of a operating process carried out at the power station which is a pre planned process.
"Thank you to those that have called us already for your concern, there may be further similar noises which again are nothing to worry about."
But the police statement provoked an angry response from people living near the nuclear power station.
"If it was a pre planned process then it would have been nice to have informed the public!", said Stefanie Jane.
Neighbour Peter Dowbiggin added: "Totally agree, pre planned at that time? Not happy at all! Whoever 'pre-planned' this needs talking to.
"What did the station manager think would happen? Did he think locals wouldn't notice?"
Hannah Sawford in Lancaster said: "I literally just heard a bang while reading this police statement and I'm in Lancaster.
"Strange to pre-plan some big bangs in the middle of the night. Why not during the day when people are not trying to sleep!?"
Police said the the lack of an advanced warning about the 'pre-planned process' had caused unnecessary alarm.
Lancashire Police said it has reported the public's concerns back to EDF via the Civil Nuclear Constabulary.
Was the incident at Nuclear Heysham Power Station pre-planned or not?
Police tried to calm people's fears regarding the loud noises at Heysham Power Station by releasing a public statement at 11pm.
The police statement explained that the loud 'gunshot' sounds were part of a 'pre-planned process' at the nuclear site.
But according to the EDF website, one of Heysham 2's nuclear reactors experienced a 'non-planned shutdown'.
The website says the nuclear reactor remains 'offline' this morning, following a 'manual trip following an interruption to control system electrical supplies'.
What did EDF say?
This morning (August 16), EDF confirmed that the noise was a result of an 'unplanned shutdown'.
An EDF Energy spokesperson said: "Yesterday afternoon we started the process of re-starting one of our reactors at Heysham 2 power station after an unplanned shut down.
"During this process there was some noise later in the evening that lead to some speculation about its cause on social media.
"I would stress that the noise was completely normal for this kind of operation and we do apologise if this caused any alarm or caused any inconvenience.”
In February, the government's nuclear watchdog, the Office for Nuclear Regulation, ordered EDF to improve its safety standards at Heysham after a steam leak seriously injured three workers in November last year.