A half-finished building that was being constructed illegally in a suburb of India's financial capital has collapsed, killing 39 people and injuring 69 others.

Rescue workers with sledgehammers and saws struggled to break through the rubble in their search for possible survivors in the Mumbai suburb of Thane.

Residents said labourers paying rent of around €4 a day had lived in it.

A shortage of cheap homes has led to a rise in illegal construction by developers who use substandard materials and shoddy methods in order to offer cheap rents to low-paid workers.

Eleven children are among the dead.

At least four floors of the building had been completed and were occupied.

Workers had finished three more floors and were adding an eighth floor when it collapsed.

Police said they were searching for the builders and would charge them with culpable homicide in connection with the disaster.

The building did not have the necessary clearances from local authorities, according to police.

Police with rescue dogs are searching the building, as rescuers and nearby residents stand on the remains of the roof trying to get to the people trapped inside.

Rescue workers are believed to have pulled 15 people, including an infant, alive from the collapsed building.