The arson squad is investigating after a house fire left three young children in hospital with life-threatening injuries.

The children – reportedly aged 21 months, three and five – were rescued from the blaze at Sydenham in Melbourne’s north-west and rushed to the Royal Children’s Hospital in critical conditions.

Victoria Police’s arson and explosives squad is investigating what sparked the fire, which occurred after nearby residents heard a large bang.

“It was like an explosion. At first, we thought it was gunshots and so, we cowered a bit, and then I peeked out the back window and saw the flames and the smoke coming out the back,” one neighbour told the ABC.

Victoria Police said on Monday the area had been cordoned off and a crime scene established. Police are still trying to work out where the children’s parents were when the fire broke out.

“No one else was injured in the fire, with investigators working to determine if anyone else was present in the home at the time or just prior to the fire,” they said.

Detectives and an arson chemist were at the scene on Monday.

Fire Rescue Victoria was called to the Sydenham address just after 9.30pm on Sunday to find smoke and flames billowing from the roof of the brick home.

“Firefighters arrived on scene within six minutes to find a single-storey brick dwelling fully involved,” an FRV spokesman said.

“Crews wore breathing apparatus to tackle the blaze and conduct an internal search of the property.”

The three children were rescued by firefighters and given emergency care alongside paramedics before being taken to hospital.

They remained in Melbourne’s Royal Children’s Hospital on Monday, all in a critical condition.

Fire Rescue Victoria said the properties either side of the house were not affected but would be checked for smoke damage.

Power and gas companies were requested to attend the site.

-with AAP