THE grenade was found on the towpath at Dudbridge just before 11am by contractors working on the canal restoration project.
After dredging the waterway, they discovered the grenade lying in the middle of the towpath while moving heavy machinery.
They called the police, who attended the scene and cordoned off the area.
Police, including a Royal Logistic Corps Bomb Disposal team, set up base at Marling School's sports field.
The grenade dated from the Second World War and was standard issue for the Home Guard.
It was safely detonated at 1.50pm and the explosion could be heard in the centre of Stroud.
More to follow.
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