A 7.3 magnitude earthquake killed at least 41 people and spread panic in Nepal yesterday, bringing down buildings already weakened by a devastating tremor less than three weeks ago and unleashing landslides in Himalayan valleys near Mount Everest.

Most of the reported fatalities were in villages and towns east of Kathmandu, only just beginning to pick up the pieces after the April 25 quake that left more than 8,000 people dead.

The new earthquake was centred 76 kilometres east of the capital in a hilly area close to the border with Tibet, according to coordinates provided by the US Geological Survey.

Villagers who watched their homes collapse said they only survived because they were already living in tents.

Aid workers reported serious damage to some villages in the worst affected Charikot area and said some people were still trapped under rubble. Witnesses said rocks and mud came crashing down remote hillsides lined with roads and small hamlets.

“We still don’t have a clear view of the scale of the problem,” said Dan Sermand, emergency coordinator at Medecins Sans Frontieres, which surveyed the area by air and saw multiple landslides.

The United Nations has only raised 13 per cent of the $423 million it said was needed to help Nepal recover from the April tragedy, and relief workers warned that even more funding would now be needed.

In the town of Sangachowk, residents were outside receiving government food aid when the quake struck.

“It was really lucky. If we were inside, it would have been a lot worse,” said Purushottam Acharya, 38.

A family sat on the edge of road where their house had just fallen down the hill, rubble spread over hundreds of feet below. “We watched it go down slowly, slowly,” said Ashok Parajuli. 30.

In Charikot, where at least 20 bodies were recovered, hotel owner Top Thapa said the quake was at least as strong as last month.

We saw the mountain in front of us fall down – earth and rock

“We saw houses falling, collapsing along the ridge,” said Thapa, owner of Charikot Panorama Resort. He said he saw five or six multi-storey buildings come down.

Politicians dashed for the exit of Nepal’s Parliament building and office towers swayed as far away as New Delhi. The tremors that began at around 12.30 could be felt in Bangladesh and were followed by a series of powerful aftershocks.

Parents clutched children tightly, and hundreds of people frantically tried to call relatives on mobile phones. Shopkeepers closed their stores and the streets were jammed with people rushing to check on families.

Elsewhere, people huddled in public spaces, too nervous to venture inside.

“I am very scared and I am with my two sons. The school building is cracked and bits of it, I can see they have collapsed,” said Rhita Doma Sherpa, a nurse with the Mountain Medicine Center in Namche Bazaar, a departure point for trekkers headed to Everest. “It was lunchtime. All the kids were outside. Thank god.”

May is peak season for climbing and trekking in Nepal’s high altitude valleys and peaks, but the usually bustling lodges and tea-houses were close to empty after thousands of tourists fled the April quake.

Dambar Parajuli, president of Expedition Operators’ Association of Nepal, said there were no climbers or Nepali sherpa guides at Everest Base Camp. Mountaineers seeking to scale the world’s tallest peak called off this year’s Everest season after 18 people died when last month’s quake triggered avalanches on the mountain. In Lukla, the departure point for treks to Everest, buildings cracked and small landslides were triggered when the ground shook. At least three school children were injured.

Susana Perez from Madrid was on a 10-day trek with her husband to Island Peak in the Everest region and was about to reach Lukla. “We saw the mountain in front of us fall down – earth and rocks. There were some houses underneath but it was not clear if they were hit,” Perez said.

In Nepal the death toll reached 41, with 1,066 injured, police spokesman Kamal Singh Bam said. Five people were killed in Indian states bordering Nepal, according to officials, and Chinese media reported one person died in Tibet after rocks fell on a car.

Indian and US military aircraft flew more than 60 wounded people to Kathmandu from affected areas.

Nepal had barely begun to recover from the devastation caused by last month’s 7.8-magnitude earthquake, the country’s worst in more than 80 years, which killed at least 8,046 people and injured more than 17,800.

Hundreds of thousands of buildings, including ancient Hindu and Buddhist temples, were destroyed.