More than 50 fire fighters are battling a large blaze at a Booths warehouse in Brindle, say fire services.
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Crews from across the county were called out to Brindle Mill in Bournes Row after an automatic fire alarm sounded at a warehouse.
Four fire engines initially attended the call just before 10am on Wednesday. This was scaled up to ten engines, an aerial ladder platform and a stinger.
The fire initially started on the first floor of the two-storey warehouse which measures 20m x 30m.
Witnesses have reported that items are "exploding."
A spokesman for the fire service said: "The fire has broken into the roof area and the aerial ladder platform is in attendance.
"We are working to bring the fire under control and to stop it from spreading.
"Part of the building has collapsed and the council have been called to assess its structural safety.
"The control room has also passed a message to Network Rail to ask them to slow their trains down on the neighbouring track due to a large smoke plume.
"We would advise any drivers in the area, who can see smoke to exercise a similar caution."
Fire crews have confirmed that nobody has been injured in the incident.
Residents in the area are being asked to keep their windows and doors closed.
One local resident described the scene with flames leaping around 30 feet high and smoke billowing around the area.
Adam Rainsbury said: "I was working from home when I heard a fire engine go down the road which is quite unusual.
"I looked out of the window and saw fire engines everywhere.
"From my house I could see the flames leaping above the roofs of the houses and smoke billowing across the area.
"I could hear loud banging, whether this was an explosion or things falling over I don't know.
"A lot of people here work in the industrial park and obviously there's a lot of concern about jobs."
Lancashire County Council confirmed that St Joseph's primary school was closed and children were relocated to neighbouring school Brindle Gregson Lane.
The children later returned to the school. All parents have been informed.
A spokesman for Booths said: "We can confirm there is a fire at the building works department at Brindle Mill.
"All staff have been safely evacuated and the fire brigade are in attendance.
"Brindle Mill is the works department of Booths and service and supply to Booths stores are unaffected by this incident."