The bag was fished out of the Grand Union Canal after a passer-by spotted it on the surface of the water at about 1500 GMT on Sunday.

Police cordoned off the area and underwater search teams checked the waterway for other remains.

Maria Chalk, 54, who runs a business near where the package was found, said the discovery had been worrying her ever since.

It is not an every day occurrence but we do see rubbish that floats down the canal all the time

Keith Hartley

She said: "It is upsetting. We see things floating down the canal all the time.

"We have seen other things in the water in the past few months like that and I think the police are very interested to know what we have seen."

Keith Hartley, 52, landlord of the Albion Inn close to the scene, said police told him the package was an arm in a well taped-up black plastic bag.

He said: "It is not an every day occurrence but we do see rubbish that floats down the canal all the time."

'Vital significance'

A police spokeswoman said a full-scale investigation was being carried out into the incident near Belton Road bridge.

Detective Superintendent Bob Small appealed to residents for help.

He said: "If you saw something suspicious in the area or have any information which you feel could help the inquiry please get in touch.

"Even the smallest detail could have vital significance."

The area is popular with dog walkers, anglers and cyclists and officers believe a number of these people could help with their investigation.