A Canadian rail disaster that "probably" killed as many as 50 people was likely the result of an engineer's failure to set the brakes on an unmanned train owned by a US railway company, officials said.

Twenty people have been confirmed dead and 30 remain unaccounted for with little hope of being found alive following the explosive train crash, Quebec provincial police inspector Michel Forget told reporters.

All 30 people, he said, were "missing and most probably dead in this tragedy," adding that authorities had met with their families.

"It is with great sadness that I give you this news," he said.

The confirmed death toll was raised from 15, while 10 people previously reported missing were located. Only one victim has been identified.

The freight train carrying oil crashed on Saturday after rolling down a hill from a nearby town and flying off a curve in the track, sparking a massive inferno that tore through part of Lac-Megantic, a town of 6,000 located east of Montreal near the US border.

The massive blaze forced about 2,000 residents to flee their homes, though many of them started returning on Tuesday.

Earlier the railway owner said a lone engineer had failed to set brakes properly on the train.

"Adequate hand brakes were not set on this train and it was the engineer's responsibility to set them," Edward Burkhardt, chairman of the Montreal, Maine & Atlantic Railway, said while visiting the scene.

Had the hand brakes been properly applied, he told reporters, "we wouldn't have had this incident."

The freight train had been stopped for a crew change in the nearby town of Nantes when it began to roll downhill without a conductor towards Lac-Megantic, several kilometers away.

It derailed at a curve in the tracks and several cars exploded.

Burkhardt had previously blamed firefighters in Nantes for the disaster, saying they unwittingly unlocked the train's air brakes when they shut down the main locomotive's engines to douse a small unrelated fire hours before the disaster.

He said Wednesday that the shutdown of the air brakes "was an important causal factor in this whole thing."

But he added, "The fact that when the air brakes released on the locomotive the train ran away would indicate that the hand brakes were not properly applied."

Burkhardt also said that he feels the Nantes firefighters had done "what they thought was correct" in turning off the locomotive's engine.

A track foreman called to the scene of the Nantes fire was aware they had turned off the engine but was unfamiliar with the operation of diesel locomotives, he said, and so "wasn't aware of the consequences that would come from that."

He said the track foreman informed the company train dispatcher soon afterwards but it was too late to get anyone to the scene to restart the locomotive and prevent its deadly slide into Lac-Megantic.

"There was very little time actually, we're talking minutes, and it's pretty hard to see how they could have gotten somebody to the scene that could have restarted this locomotive and prevented this thing," Burkhardt said.

The train's engineer has been suspended without pay while he is under investigation. "I don't think he'll be back working for us. That is my personal opinion," Burkhardt said.

Part of the disaster zone remains off-limits as police and federal transportation officials comb through the smoldering debris for evidence, while Quebec announced Can$60 million (US$57 million) for emergency aid and reconstruction.

Canadian flags were ordered to fly at half mast at federal offices across Quebec and atop the parliament in Ottawa for one week.

"This should never have happened," Quebec Premier Pauline Marois told a press conference.

When he arrived in Lac-Megantic on Wednesday to survey the devastation, Burkhardt faced angry residents.

A 40-year-old man called him an "assassin," while Alyssia Bolduc, a young girl who lost her cousin in the fire, said: "I just wanted to see his face. I have a lot of anger. This man just cares about his money."

"It's a really sad situation," she told AFP. "I have no words to describe what's happening, no words will give us back the lives lost."

"Everyone in town knows someone who died," she said.

Burkhardt offered condolences and apologies. He said the company was following standard industry practices when it left its train on a track unattended, but said the company would no longer do so and that rules could be beefed up.

"I feel absolutely awful about this," he said. "I am devastated by what's occurred in this community. I have never been involved in anything remotely approaching this in my whole life."

"This company is going to respond to this tragedy as best it can," he said.

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