UPDATE 3.30pm: THE much loved Calen Hotel has been gutted by fire.
Just after 10am this morning the blaze tore through the historic pub, reducing the once grand building to a pile of rubble.
A fire service spokesperson said the fire began in a clothes dryer on the second level of the hotel before spreading through the building.
Four people, including the owner, attempted to quash the blaze using fire extinguishers but were unsuccessful.
By the time fire fighters arrived the hotel was completely ablaze.
BREAKING 10.30am: The historic Calen hotel, north of Mackay, is on fire and close to collapse.
Four fire crews are on scene but a witness says the building is gutted.
Karen Balks, who works at the nearby Calen store, said a crowd of 100 people were on scene watching the historic building burn.
"We looked out and there was smoke coming out of the windows," she said.
"The flames are fairly high,"
"We heard it started from a drier.
"People are saying the whole building is gone.
Ms Balks said there is a table on fire, chairs are on fire "its about to collapse, there isn't much left."