UPDATED 4.22pm: One of those seriously injured when a balcony collapsed during a spontaneous Dunedin concert last night, was a student at Otago University.

Two people are still in hospital after the balcony reportedly carrying about 30 people fell off the side of a student flat in Castle Street and landed on about 12 students below.

It was revealed earlier that Dunedin Police apparently told the band to keep playing after the incident which threw people three metres to the ground below.

Around 1500 people were packed into the courtyard between the student flats to see Six60 perform. At least 20 people were on the balcony when it cracked.

Police said 14 people were treated at Dunedin Hospital and two had serious injuries.

One witness said police and security told the band to keep playing, so it wouldn't create too much commotion.

"Obviously people were concerned and there were people hurt, but the band carried on," he said.

"Some people were still in party mode...obviously friends or acquaintances followed the injured out and were pretty shocked."

He also saw people with head injuries and broken bones.

"We saw people that had blood running from their heads and injuries to limbs and things like that."

Otago University's vice chancellor, Professor Harlene Hayne, said they were offering full support to those students injured tonight.

"Our thoughts and deepest concerns are with the students, their families and friends at this time.''

She said staff were not aware of the concert until late yesterday afternoon.

The Otago University Student's Association says the community has rallied together to support those injured in the collapse.

Students' Association president Laura Harris says students who came to the aid of those injured are being commended for their efforts by emergency services staff.

She says it was a private event, but the association is deeply distressed that people were injured.