To study the effect of tip clearance on unsteady flow in a tubular turbine, a full-channel numerical calculation was carried out based on the SST k–ω turbulence model using a power-plant prototype as the research object. Tip leakage flow characteristics of three clearance δ schemes were compared. The results show that the clearance value is directly proportional to the axial velocity, momentum, and flow sum of the leakage flow but inversely proportional to turbulent kinetic energy. At approximately 35–50% of the flow direction, velocity and turbulent kinetic energy of the leakage flow show the trough and peak variation law, respectively. The leakage vortex includes a primary tip leakage vortex (PTLV) and a secondary tip leakage vortex (STLV). Increasing clearance increases the vortex strength of both parts, as the STLV vortex core overlaps Core A of PTLV, and Core B of PTLV becomes the main part of the tip leakage vortex. A “right angle effect” causes flow separation on the pressure side of the tip, and a local low-pressure area subsequently generates a separation vortex. Increasing the gap strengthens the separation vortex, intensifying the flow instability. Tip clearance should therefore be maximally reduced in tubular turbines, barring other considerations.