DRAG racing is being investigated as the possible cause of a "catastrophic" smash that left one man dead and seven injured in Melbourne's east last night.
Two people were trapped in the wreckage last night and five others were in hospital.
Some of the injured were fighting for their lives.
Two cars - a taxi and a purple Mitsubishi Lancer sports car - collided near the corner of Viewmount and Ferntree Gully roads in Wheeler's Hill about 9.30pm.
The driver of a third high-powered car was being questioned by police last night.
"Some young people are assisting us with our investigation," Snr-Sgt John Drew, of Nunawading police, said.
Witnesses told of the carnage at the scene.
"It was horrific. There were injured and trapped people everywhere," bystander John Sharples said.
"There were stretchers and paramedics everywhere. It was like a scene from hell. The cars were completely mangled and there are people still trapped," he said.
Fifteen police cars, seven ambulances, MICA units and several fire engines attended the accident.
Dozens of onlookers gathered on both sides of the road.
Stretchers, temporary lights and emergency equipment lay around the scene.
Late last night emergency crews were still cutting some of the victims out of the cars.
The Mitsubishi, driven by a 20-year-old man, appeared to have been travelling east. It carried two teenage passengers.
Nick D'Unienville, a friend of the Lancer driver and passengers, said the men were all well known in the area.
"The car was only bought two weeks ago," Mr D'Unienville said.
The taxi had been hit on the front passenger side and was twisted beyond recognition, its windscreen and widows shattered, a wheel missing and its bonnet hanging by a thread.
Snr-Sgt Drew said the cars were travelling in opposite directions and collided as one attempted a right-hand turn.
Purple Mitsubishi Lancer sports car.. Ollie hope it wasn't you mate!