REUTERS, Lisbon

Portuguese authorities were investigating yesterday what caused a funicular railway popular with tourists to derail and hurtle down a hill, killing at least 17 people and injuring 21 when it crashed into a building.

Footage from the site showed the mangled wreckage of the yellow tram-like funicular, which carries people up and down a steep hillside in the Portuguese capital, lying where it had left the track and hit a building, just metres from another car at the bottom of the hill.

Lisbon resident Abel Esteves, 75, and his wife and grandson were among 40 passengers in the car at the bottom of the hill who saw the derailed carriage careering towards them.

“When I saw another carriage coming down, I told my wife: ‘We’re all going to die here’,” he said. “It picked up a brutal speed, took a slight turn and hit the building with a loud bang.”

Flags flew at half-mast as Portugal declared a day of mourning for the victims. The city’s remaining two lines were shut for inspections, authorities said.

Thirty-eight people were involved in the accident, with 15 killed at the scene while two more died in hospital overnight, said Margarida Martins, head of the city’s emergency services.

Among the injured were four Portuguese, two Germans, two Spanish, one Korean, one Cape Verdean, one Canadian, one Italian, one French, one Swiss and one Moroccan, she said.

The German foreign ministry said in a statement that it assumed some of its citizens were among the victims.