The fire started around lunchtime on Tuesday in a crowded residential area on the outskirts of Hanoi and flames quickly spread to engulf three neighbouring houses as clouds of black smoke filled the air, a Reuters witness said.

It took more than two hours for fire teams to put out the flames to allow rescuers to start searching for victims, the government said in a statement on Wednesday.

Prime Minister Nguyen Xuan Phuc "instructed Hanoi police to soon investigate and find the cause as well as to deal strictly with any violations," the government said in an earlier statement.

Phuc also asked Hanoi city government to close down karaoke parlours and restaurants which fail to observe fire preventive measures.

Police in charge of fire fighting ordered an urgent inspection on fire preventive measures in public places in major cities nationwide, focusing on karaoke parlours, discotheques, bars and restaurants, the government said.

Karaoke remains popular in Vietnam and is often picked as entertainment for large groups of people. However, fire drills at such places are rarely conducted and exits not always provided.