Investigators believe the blaze was caused by fireworks lighting up a music stage at the Lame Horse venue in Perm, an industrial city 900 miles from Moscow in the Ural Mountains.
Sparks from a "pyrotechnic fountain" ignited a ceiling plastered with willow twigs, decorations meant to create a rustic feel inside the venue.
The authorities insisted that safety regulations had been breached and President Dmitry Medvedev yesterday demanded that the managers be punished.
Russian officials said club managers had ignored repeated demands from authorities to change the interior to comply with fire safety standards. The Emergency Situations Minister, Sergei Shoigu, said the club had violated safety rules.
"The fire started in the ceiling and spread very quickly. Lights went out and there was panic and a stampede," Mr Shoigu said. He added the club managers had been fined twice in the past for breaking fire safety regulations.
One of the owners and an "art director" were among the five men arrested yesterday. Another suspect critically injured in the blaze was not fit to face investigators.
In recent years, there has been a series of serious fires in drug-treatment facilities and apartment buildings, and the enforcement of fire safety standards in Russia is regarded as notoriously lax. The country has 18,000 fire deaths a year, several times the per capita rate in the United States and other Western countries. In one of the worst incidents, 63 people were killed in a nursing home in March 2007.
Investigators yesterday picked through the charred shell of the burnt-out Lame Horse, while flowers piled up in front of a police cordon. Officials suggested the fireworks used on the stage were meant for outdoor use only and were too powerful for setting off in enclosed spaces. Mobile phone footage captured inside the club showed revellers were initially reluctant to leave the party before panicking at the severity of the fire's spread and rushing towards the exit. Some people appeared to be still clutching drinks as they headed towards the door.
One eye-witness described the venue as a "dry haystack" which was engulfed in flames at an electric speed, just as a party was getting into full swing. Many of the victims were crushed in the desperate stampede to escape the flames, while others suffocated in the black smoke.
Around 134 people were injured, including 80 who suffered severe burns and were in a critical condition last night. Throughout the early hours of Saturday survivors were seen on the street outside the club with blackened faces and soot-stained fur coats.
President Medvedev said the nightclub's management would be subjected to a far-reaching investigation.
"First, it seems to me they have neither brains nor a conscience," he said. "And, second, they are completely indifferent to what happened. They must be punished with the full force of the law."
The government has set up a special commission to piece together what happened inside the club, and Mr Medvedev has declared tomorrow a national day of mourning.
However, Gennady Gudkov, a senior member of the Kremlin-controlled lower house of parliament, warned that toughening criminal punishment would not solve the problem of deadly fires. He told the Itar-Tass news agency that many fire safety officials are corrupt and often turn a blind eye to violations in exchange for money.
Relatives of revellers who were inside the nightclub waited at the city's morgue yesterday for news. Information sheets were posted outside as bodies were identified. "I'm devastated. I can't believe it's happening to me," said Yevgeny Porfiryev, after learning that his son Timor, 26, had been killed.
Leonid Miroshnichenko, who lost his daughter in the fire, said that the plastic ceiling contributed to the death toll. "I would like to see the official who allowed this club to open. It was he who killed my daughter," he said.
A witness, Svetlana Kuvshinova, said: "The fire took seconds to spread. It was like a dry haystack. There was only one way out. They nearly stampeded me."
Outside the venue, a woman said: "People starting breaking down the doors to get out. They were breaking the door and panic set in. Everything was in smoke. I couldn't see anything."
Another survivor said: "A lot of people were lying on the floor of the club. Those of them who breathed were carried out and put in cars. The biggest problem was that each ambulance took only one person. They didn't take any more. We were yelling at doctors, forcing them to take more people at once."
Emergency Ministry spokeswoman Darya Kochneva said Sunday the latest victim was a man who died of severe burns in a Moscow hospital where he was flown for treatment after the fire.
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