The Fire Service says a major gas leak in a Whangarei suburb had the potential to be a disaster.
Police said a bus hit a natural gas substation at the Z service station on Kamo Road in the Northland town about 7.30am on Thursday.
The City Link Bus reversed through caging around the gas substation, bent the pipes and broke a valve causing an immediate leak of high pressure gas and a large gas cloud.
There were fears of an explosion and police began evacuating people from within 600 metres of the service station and set up evacuation centres. Shops, houses and schools were evacuated and 10 fire trucks called to the scene.
Whangarei senior fire station officer Ron Wilson said crews in breathing apparatus checked houses, telling some residents to leave and in other cases to shut doors and windows and turn off power.
Students and staff from Kamo High School, directly opposite the service station, and the nearby primary school had to be evacuated to the intermediate school outside the cordon.
Fire officers turned high pressure hoses on the gas cloud and managed to disperse 90% of it.
The leak was capped, and the owner of the gas reticulation system, Vector, shut down the substation for repairs. A spokesperson said no customers were affected because the line was re-routed.
Mr Wilson said there is always the possibility a gas cloud could ignite and the leak could have resulted in a major explosion.
"It can flash back if you get the right ignition source and the right gas mixture. It can flash back and then it all just turns to fire."
Detective Inspector Marty Ruth said a fire rescue team was able to shut off the flow of the LPG and isolate the remaining leakage. By about 9am all cordons were removed and all areas had been confirmed safe.
Civil Defence personnel were helping with the return of evacuated pupils to their respective schools.
There were no reports of injury.