New York: A giant crane collapsed at a construction site in mid town Manhattan on Saturday, killing four workers and injuring 10. 

"This accident is one of the worst the city has had," New York Mayor Michael Bloomberg said.

He said the crane "basically just flattened" a four-story townhouse with a bar on the lower level and damaged three other buildings. The bar was closed at the time.

John PlaGreco, who owns Fu Bar in the crushed low-rise building, told AP he feared one of his employees was dead in the rubble.

"Our bar is done," he said. "The crane crashed the whole building. If I wasn't watching a Yankees game, I would've come to work early and gotten killed."

Greta Welkhammer, a witness who was passing by on her bicycle, told local TV station NY1 that she looked up and saw the crane "literally split in half."

"I saw the crane crashing, splitting in half," she said, adding that she saw the building it hit "falling like a house of cards."

"Everybody was running, running; it was devastating," she said.

Bloomberg said the crane broke during a routine operation to extend its height by inserting a section and raising the top part of the crane.

The collapse also overturned and crushed cars, left rubble piled high and caused a huge dust cloud to rise over the neighbourhood.

Bloomberg said authorities were investigating the cause of the accident and emergency workers were still searching in the rubble for anyone who might be trapped.

Firefighters with sniffer dogs are scouring the rubble for signs of further victims.