Dashcam captures 'atom bomb' inferno of Melbourne plane crash

Dashcam footage has captured the fiery inferno rising from the charter plane crash in Melbourne on Tuesday morning.

The video, shot from a vehicle on a nearby motorway, shows the horrific impact into a factory outlet shopping mall near Essendon Airport.

The occupants of the vehicle gasp in horror as a giant mushroom cloud of flame and smoke shoots into the air from the mangled wreckage of the plane. The five people on board were killed in the accident.

Newshub understands the occupants were experienced pilot Max Quartermain, 63, and four American golfers on a charter flight scheduled to take 45 minutes.

At the time of the crash the Australian Transport Safety Bureau had placed Mr Quartermain under investigation over his "unsafe" flying - which another pilot says nearly killed 18 people.

He came within 90 metres vertically and 1.8 kilometres horizontally of another plane in an earlier incident.

The other pilot told the bureau that Mr Quartermain's actions were "unsafe".

"If this event did result in a mid-air collision, two aircraft would have been destroyed and 18 people would have been killed," he claimed in his report.

Max Quartermain Melbourne plane crash
Max Quartermain, the owner of the charter company that arranged the trip (Supplied)

Witness accounts of the Melbourne crash

It's understood the plane took off just before 9am (local time), reaching 50m altitude and then suffering engine failure.

Steven Leane, Victoria's Assistant Police Commissioner, says the pilot tried to turn back after realising there was a problem with the engine, but couldn't.

Authorities confirmed the pilot sent a mayday call before the crash, describing a "catastrophic engine failure".

Witnesses recalled seeing a fireball, explosions and billowing black smoke.

"All we could see was just a big fireball and what was left at this point, I mean there's pretty much nothing left on impact," witness Ash Mayel says.

Paul Edwards also saw it unfold and described the sound of the plane crashing as like an atomic bomb going off.

"I was driving to work and it's surreal because it was like an atom bomb going off right next to you. You don't realise what you're actually witnessing.

"Then a massive explosion and a wheel went flying right into Tullamarine Freeway ... if there's any saving grace for this it's that the plane didn't go onto the freeway."