Coastguards, police and the RAF began receiving calls from worried members of the public at 9am. The descriptions varied but included yellow, orange and white trails in the sky sometimes accompanied by the sound of whooshing or a loud explosion.
Sensors at the Geological Survey team in Edinburgh recorded some form of "sonic event" in the Moray Firth area.
Searches by RAF search and rescue helicopters, checks by the Coastguard and discussions with the experts at the American space agency Nasa failed to produce any explanation. No civilian or military aircraft were reported missing or overdue and the Royal Astronomical Society and Nasa said they were not aware of any stray matter in space heading towards the Earth.
Finally the Ministry of Defence cleared up the mystery - the lights were a broken up satellite re-entering the Earth's atmosphere. "There is a lot of satellite debris in space which usually burns up on re-entry to the Earth's atmosphere, but occasionally some fragments do get through. This is what we understand happened this morning," said a spokesman.
It is understood the debris could have come from a Russian satellite which was launched earlier this year.
Bill McFadyen, of Aberdeen Coastguard, said the calls about the lights came from Tyneside and County Durham up along the Scottish coast to the southern tip of the Outer Hebrides and from well inland.
"It's very unusual to have something on this scale all the way up the northern coast of Britain. It's a complete mystery to us."
A spokesman for RAF Kinloss said they had searched an area between Duns and Greenlaw in the Borders after a suggestion that the lights were an aircraft, but found nothing.
David Galloway, of the Geological Survey in Edinburgh, said a "sonic event" had registered on six of its seismometers at 9am.Reuse content