An explosion on Tuesday at Bulgaria's oldest arms factory killed one man and two women are feared dead in the central town of Kazanlak, officials said.

"The body of one of the three workers in the workshop, a 55-year-old man, was thrown out by the blast, he was dead," Plovdiv appeals prosecutor Todor Deyanov said outside Arsenal Kazanlak arms and munitions factory.

"Two women, aged 53 and 43, who were also there at the time of the accident, are missing," he told reporters. "There's little hope that they survived."

One woman was also hospitalised with severe burns after the blast that saw the workshop for rocket flares and fireworks razed to the ground.

The prosecutor said the most likely cause of the accident was failure to follow safety rules.

Rescuers and prosecutors were unable to enter the area due to the risk of another explosion, he added.

Arsenal is Bulgaria's oldest and biggest arms and munitions plant, which was the only licenced producer of Russian Kalashnikov assault rifles outside the Soviet Union during the Cold War.

The factory was fully privatised in 2011 and was still making a wide range of assault rifles, heavy and light machine guns and ammunition.

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