MELBOURNE • A light aircraft smashed into shops and exploded in a "massive fireball" yesterday morning, killing all five on board. The four American passengers were reportedly golfers on holiday.

The twin-engine Beechcraft plane veered just after take-off into the DFO Essendon shopping centre - which was still closed - next to the Essendon Fields airport near Melbourne.

"Five on the aircraft and looks like no one has survived the crash," said Victoria Police Assistant Commissioner Stephen Leane.

State Premier Daniel Andrews described the incident as "the worst civil aviation accident that our state has seen for 30 years".

The private charter was travelling from Essendon, north of Melbourne, to King Island, slightly less than an hour to the south.

It came down just short of a major motorway, which was packed with heavy traffic during the early morning commute.

Live television footage showed burnt wreckage, flames and major damage at the shopping centre and adjacent buildings, with a column of thick black smoke rising into the air.

The shopping centre was not due to open for another hour and the authorities confirmed that no one inside had been hurt.

A taxi driver called ABC Radio and described what he had seen from the motorway.

"I saw this plane... When it hit the building, there was a massive fireball," said the cabby, whose name was given as Jason.

"I could feel the heat through the window of the taxi, and then a wheel - it looked like a plane wheel - bounced on the road and hit the front of the taxi as we were driving along."

Victoria Police Superintendent Mick Frewen said that the investigations are centred on a "catastrophic engine failure".

The 60-year-old Australian pilot, who was said to have been highly experienced, made a mayday call before crashing.

The United States Embassy in Canberra said the four passengers were American citizens.

Flights in and out of Melbourne's main airport were unaffected, while Essendon's airport, which is used mainly by light aircraft, remained closed.

The Australian Transport Safety Bureau is investigating the crash.

AGENCE FRANCE-PRESSE, REUTERS