Officials have given the "all clear" over a toxic cloud, hours after warning the residents of the town of Igualada in Catalonia to stay inside.

LATEST: Emergency services give partial all clear for people to leave their homes. Children, the elderly, pregnant women and people with respiratory illnesses are still advised to remain indoors.

A spokesperson from Igualada's town hall told The Local that the cloud has now cleared and "everything is returning back to normal".

The three people injured in the explosion are all "out of danger", the Catalan interior ministry confirms.

Schools said that they had been inundated with calls from worried parents while roads around the immediate area remain closed.

Earlier on Thursday, Catalonia’s Civil Protection authorities ordered people in the town of Igualada and its surrounding areas to stay indoors after an explosion caused a fire in a local chemical factory.