More than 17,000 residents were asked to evacuate the suburban town of Apex, North Carolina early Friday after a hazardous materials fire shot flames some 40 metres into the sky.

The fire released a greenish-yellow cloud of deadly chlorine gas into the air that could be seen and smelled from as far as three kilometres away.

Hospital officials said 44 people were sent to emergency rooms with breathing problems but most were later released.

Mayor Keith Weatherly said evacuated residents would only be allowed to return after the fire was fully extinguished, which is expected to be Saturday morning at the earliest.

"We want to err on the side of safety and not send anybody home," said Apex Fire Chief Mark Haraway.

The fire reportedly began around 10 p.m. Thursday night at EQ Industrial Services -- a hazardous waste business that housed a variety of volatile chemicals. All of the plants 25 employees had left the building by 7 p.m. Thursday.

Town manager Bruce Radford told reporters he saw a chlorine cloud rise 15 metres in the air and flames shot three times as high.

He estimated there were 20 to 30 explosions at the plant.

The fire then spread from the chemical plant site and appeared to burn four petroleum tanks belonging to another company, said Weatherly.

On Friday night, three large fires continued to burn, all within the collapsed EQ building.

In March, EQ was fined $32,000 for six plant violations, including failure to "minimize the possibility of a sudden or non-sudden release of hazardous waste... which could threaten human health or the environment."

But Robert Doyle, an Environmental Quality spokesman at EQ Industrial Services' headquarters outside Detroit, cautioned that the violations may not be related to the cause of the fire.

"Because of the many different types of waste that we bring in, it's very difficult to determine the cause of the fire," he said.

He said the company passed a required inspection as recently as late September.

Robert McCann, a spokesman for the Michigan Department of Environmental Quality, told The Associated Press that extensive damage is making it difficult for investigators to determine a cause.

Businesses and schools in Apex, which has a population of 28,000, were closed Friday.

With files from the Associated Press