SHANGHAI - The Shanghai government says the deadly New Year's Eve stampede that killed at least 36 revellers was not caused by a rush to pick up fake US dollar notes thrown from a nearby building, contradicting witness accounts.

Reports meanwhile said the unexpectedly large turnout for the countdown had overwhelmed security measures and led to the tragedy, which also left 47 injured, 13 of them seriously.

"According to investigation by the police, the fake notes were supposedly cash coupons for a pub located at (the shopping mall) Bund 18. Surveillance video footage shows that the notes were thrown from the building, which is 60m away from the site of the stampede," the city government said in a statement posted on its account on the social media website Weibo late on Thursday.

"While some people were shown to pick up the notes, it did not cause a rush and, in fact, happened after the stampede incident," the statement added. It said investigation was on-going.

The disaster, centred on a wide stairway leading up to a riverfront promenade, happened shortly before midnight on Wednesday as people packed the Bund area to usher in 2015.

While some witnesses said partygoers had scrambled for fake money thrown from a building, others said this was unlikely to have been the main cause and huge crowds were to blame.

"People were screaming, women were screaming and people started jumping off the staircase to get clear," a Singaporean Shanghai resident who gave her name as Sarah told Agence France-Presse.

"There was quiet, and then people on the stairs fell in a wave and people started to get trampled," said Sarah.

Media reports also point to the fact that police were ill-prepared to deal with the bigger-than-expected crowd. Only 1,200 officers were deployed to control as many as 300,000 revellers, according to the Beijing-based Jinghua Times.

The police, the source said, had underestimated the turnout and reduced their initial deployment as no light display was staged for Wednesday's countdown, unlike in 2013, over security concerns. In spite of this, more people swarmed the Bund than in the previous year, the source said.

Senior officer Cai Lixin acknowledged there were fewer police than for some previous events.

"Yesterday, there wasn't an event, therefore we didn't arrange for as many officers compared to something like last year's National Day celebration," he was quoted as saying by the government-linked Shanghai news portal Eastday.com, in a comment later apparently deleted from the website.

At about 11:30pm, someone fell down as late-comers and people about to leave the waterfront area pushed against one another, sparking panic and resulting in a stampede, the report said.

The youngest of the 32 victims identified so far was a 12-year-old boy, the oldest 37. All but four were aged 25 or under, according to a list released by the city government on Friday, and 21 were female.

University student Chen Xiaohang placed white chrysanthemums at the site in memory of the sister of a high-school classmate who died. "I feel very sad about this and I hope the government will offer better safety controls for events like this," she told AFP.

Shanghai residents were questioning why the city government did not control the crowds. "The Shanghai government should take responsibility for the incident. Most of the young victims must be the only child of their families," taxi driver Xu Jianzhong said.

Under China's strict birth control regulations most couples are restricted to a single child.

Chinese President Xi Jinping has demanded an immediate investigation shortly after the incident.

The tragedy was a "wake-up call that the world's second-largest economy is still a developing country which has fragile social management", the official news agency Xinhua said in an unusually critical commentary.

Earlier, Xinhua said that among the dead was a Taiwanese, and that 25 of those killed were women. It added that the first 10 identified fatalities ranged in age from 16 to 36.

A Malaysian student at a Chinese university was among the dead, Malaysia's foreign ministry said.

Another Malaysian and two Taiwanese were among the injured, the Shanghai government reported.

The Bund, renowned for its colonial architecture, is the former financial district of China's commercial hub and now a popular tourist destination, packed with high-end restaurants and expensive boutiques.

Shanghai residents have traditionally flocked there to celebrate New Year, and more recently the district government has staged official celebrations.

The annual "countdown" which usually includes a light show, performances and fireworks was scaled down and moved to a new location specifically due to concerns about overcrowding after nearly 300,000 people turned out to see the spectacle last New Year's Eve, the Shanghai Daily said.

But people continued to show up at the Bund, and in even greater numbers than in 2013.

Amid the chaos on Wednesday, people carried the dead and injured, most of them young people in their 20s, through a gap in the crowd as flashes from emergency vehicles and revellers' light sticks lit up the night, mobile phone video footage viewed by AFP showed.

American Andrew Shainker, an English teacher, posted on Chinese messaging network WeChat: "I witnessed lifeless bodies being carried out of a crowd one by one and dumped on the street.

"You could hear screams of panic. What I thought was the best view on the Bund ended up being a front row seat to an international tragedy."

"I felt I was suffocating," wrote one person posting on Weibo. "Some people with us will not come back."

Xinhua also stated that police "expressed regret over their failure to effectively intervene" when the flow of people "increased irregularly" at 11.30 pm.

Police forced their way into the heart of the crowd and found some people had "physical discomfort", officer Cai was quoted as saying.

Both Sarah and Mr Shainker were in Bund 18, a shopping and entertainment complex where witnesses said dollar-like notes had been thrown from a window, prompting a scramble to retrieve them.

But others pointed out that a wide street separates the building from the staircase where the main crush occurred.

Pictures posted online showed the slips of paper were a similar size, shape and colour as US currency, but emblazoned with the logo of M18, a nightclub, and stamped "New Year 2015".

Xinhua said on Thursday that surveillance footage showed the notes had been thrown after the stampede, at 11.47 pm, citing the Shanghai police official microblog.

Shanghai television said authorities were investigating the money-throwing incident, but attributed the cause of the accident to people slipping and falling in the crowded conditions.

The plaza where the accident took place is named for Shanghai's first Communist mayor, Chen Yi, and mourners laid flowers at his statue on Thursday.

Large numbers of police were stationed in the area Thursday and a nearby subway station was closed for safety reasons, Xinhua said.

One young man emerged from the Shanghai No. 1 People's Hospital, where most of the injured were taken, telling AFP: "My wife is dead."

Most large gatherings in China are carefully controlled but there have been other incidents in which overcrowding has caused deaths.

ADDITIONAL INFORMATION FROM AFP