A big lift came down to earth with a crash yesterday, blocking two busy Dunedin streets and narrowly missing a bus carrying 6- and 7-year-old schoolchildren.

The 49-tonne crane had just hoisted a cooling tower to the top of Dunedin Hospital when it overbalanced.

The 63m boom smashed on to Frederick St and through the intersection with Cumberland St, in front of the bus carrying 50 Outram School pupils on a trip to Otago Museum.

Bus driver Bob Mitchell slammed on his brakes and was able to stop in time.

"It was as close as you would want to get," he said. "I saw it just before it hit the road."

The boom of the crane had to be cut into pieces before the cab could be picked up by two other cranes and righted yesterday afternoon.

Dunedin Crane Hire owner Doug Hall said he did not know what had caused his $1 million, four-year-old crane to tip over, but said it could have been a computer malfunction, as the machine was working well within its limits.