A 500-metre exclusion zone was set up as a plume of white smoke billowed out from the port across the River Forth and 13 fire engines were at the scene.
Locals were warned to stay indoors and keep doors and windows shut, although police said there was "no known immediate danger" to members of the public. But last night angry residents said authorities had failed to warn them of the leak.
Police said the vapour was escaping from a metal container in the docks and the leak may have been sparked by an incident involving a lorry. A source told The Scotsman the leak had occurred when a container being transported by a vehicle in the dock area either fell or was put down too heavily.
Authorities last night said the incident was "under control", but they were still investigating what chemicals were involved in the leak, which is believed to have started at 4pm yesterday. Workers at the site said the night shift had been called off and all staff had been evacuated.
Initial reports yesterday suggested one of the substances leaking was divinylbenzene, which experts say can cause irritation to the eyes and nose. But officials could not confirm whether it was the chemical that had been leaked and said they believed there may have been other substances involved.
Yesterday, a spokeswoman for Central Scotland Police said: "Vapour is escaping from a metal container tank within the docks and is causing a large plume above the River Forth. The current wind direction means the vapour is being blown towards the river, where it is dissipating."
The spokeswoman added that efforts were being made to establish the identity of the vapour. She said: "At this time, there is no requirement for any evacuation and no known immediate danger to the public. As a precautionary measure, the public are being asked to keep windows and doors closed and stay inside."
Having been declared a major incident, the Central Scotland Strategic Co-ordinating Group protocols were brought into force and the emergency services were liaising with bodies including Forth Ports, operators of the port, police said.
But nearby residents were angry that they were left to find out about the incident from news bulletins on TV and radio. Julie White, 30, an administrator with Capability Scotland in Grangemouth, said she only found out about the incident by chance at around 11pm while watching television. It was "an absolute disgrace" that no warning siren been sounded in the town, she said. "My back window was wide open and my wee boy was playing out in at the back and I could smell burning." She added that the information she had received was very confusing.
Another resident, Aileen McGuire, 40, who works in an accounts department in Bo'ness, said the town was equipped with sirens to warn of any possible emergency at the oil refinery.
"How can they tell you that the police have informed us to keep our doors and windows closed when no siren went out?" she asked.