As the resort town of Crans-Montana reels from the news of a tragic fire at a New Year's Eve party, a witness has recalled hearing screams and seeing people covered in blood in the aftermath of the bar blaze.

Around 40 people are believed dead and 115 others are injured, according to local authorities.

Many are suffering from serious injuries, including burns.

The fire started at Le Constellation bar about 1:30am, local time, on January 1 after a crowd of young people packed into the venue to ring in the new year.

"I thought it was like [a] fight, like usual, maybe when people are drunk. But at the end … people start[ed] to scream," witness Ariel Amar, from Geneva, told the ABC.

"And after I've seen a guy pass next to me, covered in blood, burned.

"Even my brother came to help over there. So it was really shocking to see something like this, even when there was so much people, a lot of young people."

It is not yet known what caused the blaze but witnesses have told media outlets patrons were waving sparklers close to the basement bar's wooden ceiling at the time the fire broke out.

Mobile phone vision shows Le Constellation bar engulfed by flames in the early hours of January 1. (Supplied)

The sparklers were reportedly attached to champagne bottles.

"The sparks flew up to the ceiling and the whole thing caught fire. In a few seconds, the entire ceiling was on fire," one witness, Julie, told The Times.

Officials said the blaze likely triggered the release of combustible gases that ignited violently and caused what firefighters call a flashover or backdraft.

As the flames quickly spread, a crowd of people surged to the exit.

Eyewitness accounts suggest revellers made their way out of the basement using a narrow staircase or picked up furniture to smash through windows.

"I thought I was either going to die or I'd manage to get out," eyewitness Nathan said.

"But the only way was through a window, but the windows were blocked, so I grabbed a table and tried to smash it against a window.

"I couldn't, and I thought, well, I'm going to die. But finally, I managed to kick the glass, it broke, and then we got out."

First responders were quick to arrive on the scene but faced a difficult task treating a flood of injured people.

Mr Amar said emergency services appeared to be "overwhelmed", at least at first, as they began triaging revellers.