Two Australian sisters have been splashed with acid in a London nightclub attack.

Two Australian sisters injured in a suspected acid attack in a UK nightclub say they feared they were caught up in a terrorist event.

The pair were among 12 people injured when a corrosive substance was thrown from a bottle at the Mangle nightclub in Dalston, east London, on Monday morning during a dispute between two groups.

Isobella and Prue Fraser, aged 22 and 20 respectively, said chaos erupted after the fight broke out at around 1am.

“Everyone was running around screaming and we could smell gas and couldn’t breathe properly,” Isobella told Mamamia.

“We felt scared and vulnerable as we were in a club that was underground packed with people. We thought it was a terrorist attack.”

The Newcastle model said strangers helped by pouring water on her and her sister in the moments after the attack.

She ultimately suffered third degree burns to her arm and back, while her sister, who currently works in London as a nanny, suffered burns to her arm.

While she is still in pain, Isobella told Mamamia she and Prue consider themselves fortunate that their injuries were not more serious.

"We are very grateful," she said. "It could have been on our face and eyes, like it was with some."

Police said two men aged in their 20s were seriously hurt in the incident, and are in a serious but stable condition in hospital.

"The substance is yet to be identified, but it is believed to have been acidic," police said in a statement.

The London Fire Brigade said the substance was identified by a PH paper test as a strong acidic substance.

Some 600 people are believed to have been inside the venue at the time.

The male suspect remains at large.

-With AAP