At least 17 dead, 50 injured when a bus packed with people returning from Tihar festival encountered mechanical problem.

An overcrowded bus drove off a mountain highway and crashed in a river in Nepal, killing 17 people and injuring 50 more, a police official said Monday.

The bus was packed with people returning from festivities and appeared to have a mechanical problem before skidding off the highway on Sunday, Police official Madhav Kafle said.

Among the injured, 21 were still hospitalised on Monday for medical treatment.

Kafle said passengers heard a loud sound and the steering appeared to have failed before the bus drove off the highway and crashed in the Sunkoshi River 20m (70 feet) below.

The crash site is about 120km (75 miles) east of the capital, Kathmandu.

The bus was crowded because the Tihar festival ended last week and many people were returning back to work from their villages.

Bus accidents in Nepal, covered mostly by mountains, are blamed on poorly maintained vehicles and roads.