BBC Home Affairs Correspondent Daniel Sandford said senior counter-terrorism officers were assembling in London and liaising with the Home Office.Unconfirmed reports from two unnamed US officials suggested the attack was carried out by a suicide bomber.
The BBC's Tim Ashburner, who is at the scene, spoke to some volunteer paramedics who treated the injured for "shrapnel-like injuries". Shortly after the blast Manchester Victoria station, which is close to the concert venue, was closed and all trains cancelled.
Greater Manchester Police carried out a precautionary controlled explosion in the Cathedral Garden area of the city at about 01:32. The force confirmed it was not a suspicious item.Prime Minister Theresa May has said her thoughts are with the victims and families of those affected in "what is being treated by the police as an appalling terrorist attack".
Greater Manchester metro mayor Andy Burnham said: "My heart goes out to families who have lost loved ones, my admiration to our brave emergency services. "A terrible night for our great city."
A number of eyewitnesses have described the confusion in the aftermath.Andy Holey, who had gone to the arena to pick up his wife and daughter who had been at the concert, said: "As I was waiting, an explosion went off and it threw me about 30ft from one set of doors to the other set of doors.
“When I got up I saw bodies lying on the ground. My first thought was to go into the arena to try to find my family. "When I couldn't find them, I went outside with the police and fire and looked through some of the bodies to try and find my wife and daughter.I managed to find them eventually and they're OK.”