Ulster Unionist councillor Darren Guy, who chairs the local policing and community safety partnership believes the incident was timed to cause maximum disruption.

He also said it may have been linked to the MoD being represented at a careers event at the hotel in September.

"Recently, there was a careers event held in that hotel where I believe an RAF [Royal Air Force] stall was there for the careers event at that time.

"I think this was specifically done this week to cause as much disruption as possible during the 40th Halloween celebrations with thousands of international visitors visiting the city and the amount of families, especially young families going out to enjoy the many things on offer.

"It is totally reckless and these people don't think about anyone else but themselves."

Sinn Féin councillor Christopher Jackson said it was too early to "speculate" about any link between the alert and the jobs fair.

"We need clarification from those responsible," Jackson said.

He said this was "a disgusting attack on the city and the people of Derry".

"There is no justification whatsoever for carrying this out and putting people in danger, especially when the city is gearing up for the 40th anniversary of the Halloween festival.

"Derry is a warm and welcoming place and it's disgusting why someone or some organisation did this."

Foyle SDLP MP Colum Eastwood told BBC Radio Foyle's North West Today programme the incident must have been terrifying for those members of the public in the vicinity of the hotel .

"This was clearly a viable device which is really frightening for the staff and the visitors to the hotel and to the hundreds, probably thousands of kids who were at that funfair yesterday and have been over the past number of days," Eastwood said.

"I don't know what entered someone's head to think this was a good idea.

"It is appalling, reckless and achieves absolutely nothing."

Julie Middleton, Democratic Unionist Party (DUP) assembly member for Foyle, told BBC Radio Ulster's Good Morning Ulster programme on Wednesday that she was "deeply disturbed and disgusted".

"There is no excuse to leave a viable device anywhere at all, but in the middle of Ebrington Square, where you have people at their work, families out enjoying some half-term fun and tourists visiting and unfortunately this was designed to cause disruption and with any viable device, it was obviously designed to cause harm."

Middleton said many children would also be in the vicinity enjoying the fun fair.

"To think anyone would place something like this near our children, or anyone for that matter, is just deeply wrong."