A busy inner-Sydney street is in lockdown and homes and businesses have been evacuated after a fire erupted at a service station.

Gas-fuelled flames shot from the site in King Street, Newtown, near the corner of Alice Street.

Flames shoot from gas bottles in a service station in King Street, Newtown, near the corner of Alice Street. Credit:John Welch, smh.com.au reader

King Street was closed between Enmore Road and St Peters railway station but has now reopened. Traffic remains heavy traffic with significant delays.

The fire has been extinguished and a utility company was on site surveying the damage and securing the gas tanks.