Eyewitness Tony Morris said: "I think someone beeped their horn and it startled the reindeer, then it just started running away. It's gone up Carlton Hill and is just running around looking startled. It's just shocked a bus driver and was nearly hit by a bus."
The event was run by The Animal Company and had two reindeer, Bjorn, and Thor, 7, as well as Santa's sleigh.
Sam Manning, who works for the company, said: "We were coming down the ramp from the truck and he slipped the rope and managed to get away.
"They are flight animals by nature. Once they are in the pen they are fine, but because he got free he ran away.
"We managed to find him safely in the garden and get him back into the truck. Aside from that, everyone had a great time meeting Santa and having their pictures taken with the reindeer."