Distressing footage captured the chaotic scenes just moments after Lisbon's famous Gloria Funicular derailed, killing 15 people and injuring 23 more.

The tragedy struck on Wednesday at around 6pm when one of the cables came loose along the railway's route, sending the tram hurtling down a steep hill before it smashed into a building.

Dramatic video shows brave locals sprinting through clouds of dust toward the crumpled wreckage, hoping to pull survivors from the debris.

In the panic, one witness can be heard shouting 'There are kids under the tram' as the screams of children thought to be trapped beneath the rubble ring out.

Further footage from the site showed emergency responders pulling victims from the mangled tram-like funicular, which shuttles people up and down a hillside in the Portuguese capital.