Rescue crews work at the scene where a construction crane collapsed Friday on New York's Upper East Side, killing one worker and injuring two others. (Stephen Chernin/Associated Press)

New York City's medical examiner says a second person has died as a result of the construction crane collapse on Manhattan's Upper East Side on Friday.

The medical examiner's spokeswoman, Ellen Borakove, says the victim was a 27-year-old construction worker, Ramadan Kurtas. The accident also killed the crane's operator, identified as Donald Leo, 30, of Staten Island.

Authorities say another construction worker is in serious condition, and one pedestrian was treated for minor injuries.

It was the second deadly construction accident in the city in less than three months.

In March, a crane being used to work on a highrise building just four kilometres from the scene of Friday's accident tumbled onto a neighbouring townhouse, killing seven people.

Cranes at the site of the most recent accident had generated several complaints in the neighbourhood, including reports that safety barriers were breached and heavy loads passed over the heads of pedestrians, according to city building department records.

Inspectors found that most of the concerns were unwarranted, but they temporarily ordered one crane at the site to stop all work on April 23 for not having the proper permit and for operating the crane in an unsafe matter.

Building department records also said officials halted work after a crane on the site failed a "load test" on April 22. The crane passed a second test, however, the next day, and no violation was issued.

Mayor Michael Bloomberg has promised a full investigation into the latest collapse.

"This is just unacceptable," Bloomberg said on a local radio call-in program, "The construction industry and real estate developers, they don't want you to shut [their projects] down, but the bottom line is public safety, and we're not going to tolerate any rate of accidents any higher than it has to be."

Video pictures from the building site also showed the upper-floor balconies of the apartment building were severely damaged and a hole extended several storeys down the side of the building.

Crane collapse like 'thunder'

Friday's collapse happened in front of many witnesses.

"The sound was like a thunder clap. Then, an earthquake," said Peter Barba, who lives on the seventh floor of the building across the street from the construction site that was hit by the crane.

Barba said it appeared the entire cab came off the crane. Its main arm hit the penthouse of his building, then "took out the northeast corner," he said.

Chaos enveloped the largely residential neighbourhood of townhouses and apartment highrises as dozens of emergency vehicles raced to the scene during the morning rush hour.

Even before Friday's incident, New York's building standards department was coming under criticism for lax scrutiny of construction sites.

A city inspector resigned in late March after his arrest on charges of falsifying business records.

In April, the city's buildings commissioner quit under fire over a rising number of deadly construction accidents that have left more than 26 construction workers dead in the past year.

with files from the Associated Press