By Michael Holden and Brenda Goh
LONDON (Reuters) - A helicopter crashed into a crane on top of one of Europe's tallest residential blocks on Wednesday, killing two people as it burst into flames and spiraled down into rush-hour traffic close to the Houses of Parliament in central London.
Police said there was nothing to suggest a terrorism link to the crash on a foggy morning on the south bank of the River Thames, less than a mile from Britain's parliament, its secret services headquarters and the site of a new U.S. embassy.
In parliament, later in the day, Prime Minister David Cameron said helicopter flights over a city with an increasing number of huge skyscrapers needed to be carefully examined.
"There was a big bang and bits started showering down, then there was an explosion down the road," said truck driver Ray Watts whose vehicle was hit by falling debris.
"We saw the fireball down there and the smoke. We didn't know what way to run because there were bits coming down everywhere."
Witnesses said the helicopter hit a crane on top of the as-yet unoccupied 185-metre (200-yard) high cylindrical block - The Tower, One St George Wharf - spun out of control, fell to the ground and burst into flames, setting nearby buildings alight.
Wreckage was strewn across roads close to Vauxhall train station, a major transport hub near the south bank of the River Thames, which was packed with thousands of commuters at the time of the incident shortly after 0800 GMT.
A Reuters reporter at the scene said tangled bits of crane could be seen hanging off the side of the tower, the top of which was still shrouded by low cloud an hour after the crash.
"It is something of a miracle that this was not many, many times worse given the time of day that this happened," police Commander Neil Basu told reporters. The fire service said it had rescued one man from a burning car.
Basu said the helicopter was believed to be flying from Redhill, south of the capital, to Elstree, home to famous British film studios north of London, but had been diverted to a heliport near the crash site.
The metropolitan police later confirmed it was a scheduled commercial flight.
The pilot, named as 50-year-old Peter Barnes, was killed. There were no passengers, the police said. Another man, 39-year-old Matthew Wood, was found dead near the wreckage. Five others were taken to hospital for minor injuries and seven were treated at the scene.
The helicopter involved was an Italian-made twin-engined AgustaWestland 109, the company's best selling VIP corporate helicopter, according to a source familiar with the situation.
Edmir Pishtar, who was in a van outside the site, said he spoke to the operator who was about to get into the crane cab.
"He was literally shaking because he was getting ready to climb into the crane and he was late," Pishtar said.
Roads around the area including a route over the Thames were closed off, and bus and rail services were affected.
The Department of Transport's crash investigation unit said it had launched an inquiry and it could be several months before it produced a definitive report.
Neither the tower's developer, Berkeley Group, nor police would speculate on the cause of the crash.
Helicopters should normally fly 500 feet above tall structures. Despite its proximity to landmarks such as the headquarters of Britain's MI6 international intelligence agency, police quickly ruled out an attack by militants.
"There's nothing to suggest any terrorism link," said a spokesman for London's Counter Terrorism Command.
A local lawmaker said authorities should re-examine where and how helicopters were allowed to fly over the capital, where a number of skyscrapers - including the Shard, the highest building in western Europe - have been built in recent years.
Helicopters in London are generally supposed to fly along the River Thames and the nearby London City Airport said its flights had been disrupted due to low visibility.
"I'm sure they (helicopter flights) will be looked at as part of the investigations that will take place," Cameron said.
Builder Brookfield Multiplex said the tower's 52 floors house 212 luxury flats which media reports have suggested could sell for as much as 50 million pounds ($80 million).
(Additional reporting by Kate Holton, Paul Sandle, Tom Bill, Louise Ireland, Tim Castle and Rhys Jones; Writing by Guy Faulconbridge and Michael Holden; Editing by Louise Ireland)