Nearly 400 teenagers were in the second-floor disco in a former factory where a Halloween party was in full swing when the fire broke out around midnight and quickly spread.

The blaze triggered a stampede as panic erupted. Teenage party-goers were jumping out of windows from the second floor of the three-storey building or from the roof.

Survivors said the flames engulfed the entire disco shortly after a powerful explosion was heard.

``Panic broke out,'' said 15-year-old Besim Dzeljilji, who was at the disco.``It was total chaos. Everyone tried to get out. At the exits people were trampling on each other,'' another survivor, Jamal Fawz, 15, said, recalling the inferno as the youths were scrambling to flee the disco that had only one narrow exit.

Fawz said the fire seemed to have started from theceiling as ``lamps and loudspeakers fell to the floor''.

Firefighters spoke of a horror sight at the disco whose floor was littered with numerous corpses.

Most victims were believed to be children of refugee families from former Yugoslavia, Somalia and other foreign countries.

The premises in the brick building in Gothenburg's Hisingen neighbourhood belonged to the local Macedonian club but had been sublet to a private group for the party. The disc jockey had repeatedly urged guests to leave the building because of a fire. But at first, no one believed him.

The cause of blaze, one of the worst ever fires in Sweden, was not immediately clear.

Local rescue service chief Lennart Olin reaffirmed his earlier remarks hinting that the fire might have been set. He said the rapid spread of the flames suggested that it was not a normal fire.

Fire chief Peter Severstedt added, ``The fire began with an explosion and the whole premises was swept by flames.''

But police official Bengt Staaf said that it wastoo early to suspect arson. ``We are in the process of questioning the youngsters who were inside,'' he said.

It remained unclear why one or two emergency exits remained locked as the disco-goers tried to flee to safety.

In face of the large numbers of injured, authorities declared the city a disaster area.

Officials said seven youths who had suffered serious burns were airlifted to special clinics in Malmo, Linkoeping, Uppsala and Stockholm for medical treatment. Doctors were battling for the lives of several injured youth who were in critical condition.

Taxis, cars and buses had helped to ferry the injured to Gothenburg's four hospitals.

Several apartments were also destroyed in the flames, which some 100 firemen were still trying to douse more than two hours later as charred bodies were being pulled from the wreckage.