The incident happened at about 11.30pm at a ‘cruise’ event attended by about 300 people in an industrial estate area in Stapledon Road, Orton Southgate.
A car taking part in the event was in collision with a group of spectators.
Six men and a woman, aged between 17 and 31, were taken to Peterborough City Hospital. Five had serious but not life threatening injuries and two, who have since left hospital, were not seriously injured.
Police are appealing for anyone who saw the incident to come forward, particularly anyone who has any pictures or video footage.
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Sergeant Gareth Williams, from the road policing unit, said: “This collision could have been a lot more serious and it’s important we find out exactly what happened in the moments leading up to it.
“We know a lot of people would have witnessed it and I am appealing for them to make contact.”
Anyone with information should contact Sgt Williams, at the road policing unit, on 101
A 21-year-old man from Stamford has been arrested on suspicion of dangerous driving and at the time of going to press remained at Thorpe Wood Police Station.