Witnesses told of a loud explosion as the No 243 was engulfed by a fireball at a bus stop outside St Catherine’s Church in Pepys Road, Brockley.
The driver hurried everyone off the number 343 double decker bus after he saw a spark, say passengers.
Another explosion blew off the tyre of the bus, which hit a car parked nearby and set it alight.
The blaze started at around 8.20am and it took firefighters an hour to put it out.
Rev Sheridan James said: “I heard a loud bang, then there was another bang.”
“Within minutes the bus was consumed in flames with black smoke coming from it. It looked like a bomb explosion.
“I quickly put on my clerical shirt and rushed out in case there were fatalities.”
The fire service received 31 calls to the blaze.
A spokesman for the Fire Brigade said: “The incident took place at 8.22am on Pepys Road, SE14 and a double-decker bus and a motor car were both damaged by a fire.”
London Fire Brigade said the explosion is currently been investigated, but it could have been caused by a mechanical fault.
A spokesman for the police added: “All passengers were evacuated and there were no reports of any injuries.”
Image via ImageShack/Jason Cuddy