The quake, which registered at magnitude 8.8 on the Richter scale, caused major structural damage to buildings in Concepcíon, which has a population of one million.

The shock wave also triggered a potentially deadly tsunami which has already hit land at the southern Juan Fernandez Islands, about 400 miles off the coast of Chile, where it was reported to have caused "serious damage".

The first images broadcast from Concepcíon, located some 70 miles southwest of the epicentre of the earthquake, showed a building consumed by a massive blaze.

Streets were shown full of rubble and broken glass and patients were pictured being evacuated from the local hospital as emergency crisis centres were set up in the streets.

Others were pictured wandering dazed amongst the debris, wrapped in blankets, and covered in dirt.

Entire buildings in the historical centre of Concepcíon had collapsed, cars flattened and bridges stretching across the Biobio river which dissects the city, brought down.

Dramatic images broadcast on local television channels showed craters and fissures had opened up in the earth swallowing cars and parts of buildings.

Rescue teams were frantically trying to reach people reportedly trapped in buildings in Concepcion. Local media reported isolated incidents of looting from pharmacies and commercial centres in the city.

Several high-rise residential buildings in the city were pictured with the facades destroyed leaving interior rooms open to the elements.

Michelle Bachelet, the Chilean President, confirmed 78 people had been killed.

She declared a "state of catastrophe" and said: “With the quake of this magnitude, we cannot rule out other casualties.

"People should remain calm. We're doing everything we can with all the forces we have."

In capital Santiago, masonry crashed into the streets from buildings and the city was plunged into darkness by power failures.

Thousands of people fled their homes when the earthquake struck at 3.34am local time, gathering in the streets with many still clothed in pyjamas. Images showed a road bridge that had collapsed trapping cars beneath it.

The major quake lasted one minute and was swiftly followed by a series of aftershocks ranging from 5.6 to 6.9 on the magnitude scale.

One man told local a television news channel in the city of Temuco: "Never in my life have I experienced a quake like this, it's like the end of the world."

The earthquake struck 60 miles north-west of the Chilean town of Chillan, a spokesman for the US Geological Survey said.

Vina del Mar, one of Chile’s most fashionable beach resorts was said to be badly hit in the quake and ensuing aftershocks.

Several revelers reportedly died after they were struck by falling rubble as they left a nightclub on the seafront in the early hours of Saturday.

The coastal city, 45 miles north-west of Santiago, was packed with weekenders visiting the resort for the final days of the summer holiday.

Authorities said they had still to make contact with many outlying areas. Communication had been made difficult after telephone lines were downed across the country, they said.

Chilean officials said the worst affected town appeared to be Parral, close to the epicentre.

Santiago, 200 miles from the epicentre, suffered severe damage, with buildings and bridges destroyed and power-black outs.The city’s international airport remained closed after sustaining damage.

Chilean television said there had been a fire involving chemicals in the town of Colina, north of Santiago, but that it was now under control.

Teams of firefighters and police marched through the streets of Santiago urging calm and issuing instructions through megaphones.

One Spanish visitor who was asleep in his room on the 17th floor of the Crown Palace hotel in Santiago told Spanish radio Cadena SER how he was woken by the earthquake.

“It was a pretty intense shaking,” said Victor Garcia de la Concha.

“The bedside lamp, which was quite a weight fell from the table and shattered. The drawers in the dresser in front of the bed were rattled open.”

He reported that the building had not been damaged but guests were evacuated from their rooms and told to gather in the hotel lobby.

Initial reports indicate that the quake could be felt across Chile and also sent tremors to several provinces in central Argentina including parts of the capital, Buenos Aires, 1,000 miles away from the epicentre.

In 1960, Chile was hit by the world's biggest earthquake since records dating back to 1900.

In that disaster, a 9.5 magnitude quake devastated the south-central city of Valdivia, killing 1,655 people and sending a tsunami which battered Easter Island and continued as far as Hawaii, Japan and the Philippines.

Today's magnitude 8.8 quake is classified as a "great" earthquake that can cause "tremendous damage," according to the US Geological Survey.

The earthquake that devastated Haiti's capital Port-au-Prince on January 12 was rated at magnitude 7.0, while the one that struck Indonesia on Boxing Day 2004 measured magnitude 9.2.

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