One shocked onlooker said it was as if the Stagecoach bus had been ripped apart by a "giant can opener".

Passengers narrowly avoided being decapitated in the horror smash after a metal pole sliced through the side of the bus, severing the hand rails inside the vehicle, and showering them with shards of glass.

Stagecoach today confirmed it was launching an investigation into the collision which took place in the quiet village of Warmington, near Oundle, as the bus headed for Peterborough.

Passenger Richard Butterwick (22), who was travelling to work at BNP Paribas Fund Services UK in Lynchwood Business Park, Peterborough, when the crash happened at 9.15am yesterday, said today he was lucky to be alive.

He said: "I was dozing off when the bus crashed. There was glass everywhere, and a girl sitting near me started screaming and crying.

"The pole went through the window above the seat next to me. I was so lucky because I sometimes sit there. I dread to think what could have happened."

Around six shaken passengers had to be led off the bus.

Mr Butterwick went to see his twin sister Sam, who works at Warmington Playgroup, and she gave him a strong cup of tea.

Onlooker Carla Eames (37) was taking her three-year-old son James to playgroup at the time, and she said: "It was awful, it looked as if someone had taken a giant can opener and sliced into the bus.

"The passengers were so lucky, if they had been sitting anywhere else they would have been decapitated."

The scaffolding had been erected around the old school house building next Warmington School, which was being renovated as a private property.

Headteacher David Norwood said: "The main thing is that everyone was okay. There was a big commotion and police and Stagecoach officials were surveying the scene."

He said some children practised their journalism skills by interviewing witnesses at the scene and will now write articles on the incident.

Chairman of Warmington Parish Council Derek Rowell, who talked to builders at the scene, said that just last Friday he had contacted East Northamptonshire Council with concerns about the scaffolding.

He said: "I am surprised it was a vehicle that had a problem with it, I was concerned about pedestrians."

Stagecoach said an investigation was being launched.

Managing director Andy Campbell said: "Fortunately nobody was injured in this accident.

"We have known buses to have scrapes with scaffolding in the past, but in the four years I have been with the company I have never known anything of this scale to happen."

St George's Scaffolding Services, which is based in Spalding, said none of its workers were injured in the incident and the matter was being investigated.

Police are investigating and are appealing for witnesses to call them on 08453 700 700.