Children were on their lunchbreak when the scare happened. Pupils told teachers they saw a man with a gun by a fence running behind some local houses in Cambridge.
Staff swiftly moved the children off the playing fields and closer to buildings and then bravely mounted a search of the area.
But the mystery gunman turned out to be part of an unannounced police and military training exercise in Cambridge in the wake of the Charlie Hebdo massacre.
Now head teacher Steve Down, head of St Luke's C of E Primary School in Cambridge, has expressed his anger about not being warned of the exercise.
He told his local paper: "I am disappointed the school was not informed that this exercise was happening.
"I have to ask if conducting such an exercise outside a school is the best place, but I am pleased at how well the school responded to keep the children safe.
"I will be speaking to the police further about the incident and how they are planning on closing the case."
Mr Down said no police or military vehicles or personnel were spotted by staff near the school, which caters for 199 pupils.
But two worried brothers, who go to the school, said their young friends who spotted the gunman were 'really scared'.
One eight-year-old said: "My friend saw the man with the gun and now he is really scared.
"Why did they have guns near a school? They should have told the teachers."
Parent and former teacher Fletcher Brock, 38, said: "I can't believe the school weren't told about it.
"The man was right by the gate where a lot of the girls build dens so they would have been really close to him."Why was it held it the lunch hour and why just outside a school? I can't understand it."
One parent, who asked not to be named, said: "I think the school did the right thing. The teachers were brilliant as usual."
A police spokesman said: "Cambridgeshire Constabulary is currently taking part in a joint training exercise with the military and other stakeholders. The exercise is over two days, Tuesday and Wednesday. This exercise forms an integral part of our training programme to test our contingency plans.
"The event is pre-planned and not arranged in response to any increased threat to the region.
Members of the public may see an increased police presence in the exercise area(s), while the exercise is live.
"They can be assured that during the event, they will not experience any reduction in the quality of service provided."