About 145 people were killed when a Spanish jet taking holidaymakers to the Canary Islands crashed on takeoff and burst into flames at Madrid airport on Wednesday, an emergency services spokesman said.

Smoke billowed up near Terminal Four from the remains of Spanair’s Flight JK5022, an MD-82 jet bound for Las Palmas in the Canary Islands.

The 15-year-old plane, carrying 166 passengers and nine crew, shot off the runway at 2:45 pm local time, according to Spanair, and witnesses described a huge explosion.

"Only the tail was recognizable, there was wreckage scattered all over the place and dead bodies across a wide area. A lot of them were children," Herbigio Corral, who headed the rescue effort, told reporters.

There were only 28 survivors, he said.

Of the survivors, eight are in critical condition, an emergency services spokesman told national radio.

Development Minister Magdalena Alvarez said the cause of the accident seemed to be "an error in takeoff". But Spanish media quoted sources as saying the plane’s left engine, made by Pratt & Whitney, had caught fire.

The plane had left late after being delayed, El Mundo said.

The flight was a code-sharing operation with Lufthansa serving the Canary Islands, a popular holiday destination for tourists from throughout Europe.

Lufthansa said seven passengers with Lufthansa tickets, four of them from Germany, had checked in for the flight, and a Canary Islands official said passengers included Swedes and Dutch.

Thick columns of smoke rose into the air and police blocked off both ends of the Terminal Four runway, where more than 20 ambulances and many fire engines were stationed.

"I saw how the plane broke in two and a huge explosion," said Manuel Muela, who was driving past the airport when the crash occurred, according to newspaper El Mundo.

Police escorted tearful relatives of passengers past reporters and dozens of workers identified as psychologists and social workers arrived at the terminal.

Spanish Prime Minister Jose Luis Rodriguez Zapatero interrupted his holidays and the Spanish Olympic Committee said the Spanish flag would fly at half mast in the Olympic village in Beijing. Spain’s national soccer team wore black armbands at a friendly match with Denmark.

Spanair, which is owned by Scandinavian Airlines Systems (SAS), has been struggling with high fuel prices and tough competition during an economic slowdown. It announced it was laying off 1,062 staff and cutting routes to turn the airline around after losing $81 million in the first half of the year.

Hours before the crash, Spanair’s pilots threatened to strike. SAS has been trying to sell Spanair since last year. - Reuters