UPDATED: 5.00pm Several people have been arrested and multiple cars damaged after shots were fired at a Mongrel Mob funeral procession in Whakatane this afternoon.

More than 100 Mongrel Mob vehicles travelling in a motorcade from Kawerau to Whakatane were fired upon by what is believed to be rival gang members.

About 15 police officers were escorting the motorcade when the shots were fired on the corner of Valley and Arawa Roads.

The Armed Offenders Squad from Rotorua and Tauranga were also with the procession and stood guard outside the Mongrel Mob's destination, Hillcrest Crematorium.

Earlier, 30 rival Outback Black gang members were escorted away from the main bridge into Whakatane.

Police were also seen to be involved in a pursuit with two vehicles down Te Tahi Street shortly after the shots were heard.

Police say they are continuing to monitor the situation at the crematorium and will be with the motorcade when it leaves.