Armed officers and police dogs were called to reports of an assault on a shop worker in Belsize Park by a man carrying a gun.
Police went to the scene near the Tube station in Haverstock Hill on Thursday last week at about 4.30pm.
Witnesses said a man launched an attack on a 23-year-old shop worker, who was left with a small cut to his knee.
Several witnesses told officers that the suspect was holding a firearm.
A 54-year-old was held in connection with the incident. He was arrested near the scene and has been bailed to return to police pending further enquiries.
n Anyone with information can call 101 or Crimestoppers anonymously on 0800 555 111.
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