Television footage showed a large plume of smoke shooting into the sky above a factory in the town, which is the centre of the Indian fireworks industry some 700 kilometres (430 miles) south of the Tamil Nadu state capital of Chennai.

The NDTV and CNN-IBN private TV networks put the death toll at 10, but police were unable to confirm the figure when contacted by AFP.

"There has been a huge explosion and we have so far collected 20 bodies and sent them to hospitals, but cannot confirm how many of them are dead," local police chief Najmulhoda, who uses one name, told AFP by telephone.

"The impact of the explosion was so severe that people were hit by flying stones," the police superintendent said from the site.

Sivakasi, home to some 700 fireworks factory, is running at peak production ahead of the forthcoming festival season which includes Diwali, the festival of lights when Indians celebrate by letting off firecrackers.

"Diwali is fast approaching and there is a lot of activity going on out here," the officer said from the blast site.