Police in the German city of Munich say the venue where Oktoberfest is taking place will re-open early on Wednesday evening, after it was shut while investigators probed a potential bomb threat linked to a fire at a house in the north of the city.

The house was rigged with explosives and a 57-year-old man is suspected of starting the fire as part of a family dispute.

His body was later found at a nearby lake and police said he was carrying a backpack apparently containing an “explosive device”.

Officers closed the annual beer festival for much of the day after a letter from the suspect had been found with “a non-specific bomb threat relating to the Oktoberfest”.

Teams of explosives specialists and sniffer dogs had searched the site during the day.

Police later said that their investigations at the festival venue – the Theresienwiese, a massive open space which has held Munich’s Oktoberfest for more than 200 years – were complete and it would re-open at 17:30 (15:30 GMT).

Oktoberfest runs from 20 September until 5 October and has already attracted more than 3.5 million visitors. It is described as both the world’s biggest folk and beer festival.

Meanwhile, a large-scale emergency operation was under way in Lerchenau in northern Munich. Police said potential links between the incident there and other locations were being investigated, as well as the site of the Oktoberfest.

Police investigating the fire said they were alerted to the incident in the early hours of Wednesday morning, after receiving reports of explosions. Nearby cars were set on fire.

Special forces were later deployed to defuse booby traps inside the house.

Police said the suspect’s 81-year-old German mother and his 21-year-old daughter, a German-Brazilian citizen, were injured in the incident. They are currently in hospital receiving treatment.

Numerous emergency personnel are on-site.

“There are currently no indications that there is a danger at other locations in Munich,” police said.