Officers rushed to the housing estate on the former Howe Barracks site in Canterbury after terrified locals raised the alarm last night.
Around 15 police vehicles swooped on the military base after witnesses claimed to have spotted a man driving up and down the street waving a knife.
One onlooker claims the man drove up and down the street holding the knife out of the window before driving at a man he is believed to have had an altercation with.
The suspect then drove directly at a group of around 20 children, who scattered screaming as the Honda Civic hurtled towards them
Around 20 children were playing in the street when the car drove at them
Police raced to the scene last night
One woman, who was at her sister’s house in St Julien Avenue when she saw two men arguing, said: “One of them went home, or so we thought, but the next thing I heard a car screeching so I ran to my sister’s gate and looked outside.
“I saw a man drive at high speed, stop his car and step out. He told the other guy he was going to stab him with a kitchen knife.
“The other guy pushed the man back into his car and he screeched off again.
“But he then spun the car round and drove rapidly back up the road trying to run this man and all that was around him down. There were children everywhere.”
It is not thought anyone was injured in the dramatic incident, although some other vehicles are thought to have been damaged.
The police helicopter was also scrambled as the knifeman sped off after reportedly crushing a child’s bicycle.
The rampage comes a day after a terror attack in north London after a white van was driven at Muslims breaking their Ramadan fast as they left prayers at a mosque in Finsbury Park on Sunday night.
This is the latest in a series of terrorist attacks on the UK, including two involving vehicles which mounted Westminster and London Bridge in London and anoter attack at an Arian Grande concert in Manchester.