After 400 homes and 15 streets are incinerated by firework blast, the Dutch ask: Was it arson?

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The question was a simple one, but the Dutch Prime Minister, Wim Kok, had no answer. When Liz Tiben, a 68-year-old survivor of Saturday's devastating explosion in Enschede was presented to the shaken-looking premier yesterday, she was polite but blunt: "I said to Mr Kok, 'How is it permitted to have such a fireworks warehouse near such a lot of houses?' He nodded, and simply said it was terrible."

Twenty-four hours after the explosion at a fireworks warehouse in a residential district, intense heat kept the fire burning in the heart of a Dutch border town reduced to rubble reminiscent of a war zone. A giant, smoking crater was all that remained of the warehouse's storage bunkers. Homes were reduced to blackened ruins and surrounded by the burnt-out hulks of cars and mangled bicycle frames.

This was the Netherlands' worst disaster since October 1992, when an Israeli jumbo jet crashed into a 12-storey block of flats near Amsterdam, killing 43 people. For the 145,000 people of Enschede it is a calamity they can barely comprehend.

But while the Amsterdam air crash was essentially a random event, the Enschede blast seemed more avoidable. Last night many here were asking how it was that 100 tons of explosives came to be stored in such a densely populated area.

Saturday was a sunny day and large numbers of people were enjoying the weather in their gardens, others relaxing inside. Many witnesses recall hearing a rat-a-tat sound, which they thought was coming from a fireworks display. Ms Tiben even rang the police to ask which "idiot" was responsible for disturbing the peace of their neighbours.

In fact, a fire outside the SE Fireworks warehouse spread inside to the storage area, producing two explosions, the second of which sent a massive red fireball high into the sky.

The blast happened after three fire crews arrived on the scene to deal with the external fire. Four firemen were killed and the remainder were forced to retreat as the area was evacuated amid scenes of pandemonium.

Many here believe arson to have been the cause of the blast, although the police refused to comment yesterday on the direction their investigation was taking. But whether by design or accident, Saturday's blast brought pure terror toEnschede.

Ms Tiben, who lives three streets from the blast epicentre, opened her front door to see what the noise was and had to hang on to it as the shockwave of the explosion ripped through her home, blowing pictures and ornaments from the walls. "It was like what you see on television - like Kosovo. It was like hell," she said.

At the same moment, standing outside his bakery, Croissanterie Le Petit Pain, Bert Hendriksen was blown several feet in the air by what he described as a "warm wind".

The fire, he said, was "like an inferno" and around him was broken glass and the shattered doors of houses. "Even my refrigerator door was blown open," he said. Inside the bakery there was devastation all around. "The walls were broken. I looked up at the ceiling and saw the blue sky," he said.

Mr Hendriksen's daughter was even closer to the centre of the blast - about 300 metres away - and phoned her father in a state of shock.

"She said she saw people lying on the ground," said Mr Hendriksen. "She was crying - it was terrible - she was totally shocked".

A large part of the town was virtually flattened, but damage was spread over a much wider area. Dick Nijland, an accountant whose flat is on the outer periphery of the damaged area, said he had "never heard such an explosion". The force of the blast blew in his windows.

The effects of the carnage were visible from well outside the town. From three kilometres away, Peter Otten saw "black smoke like diesel fumes, covering the whole sky".

Before long the wounded were being ferried to the local hospital, first in dribs and drabs, later in larger numbers. Harry Wessels, who was working at the hospital, said: "We heard and felt a terrible noise. Then wounded people, bleeding all over, arrived. All the children had nose-bleeds, I think because of the air pressure. It was panic, total panic."

A day after the explosion large sections of the town remained sealed off, as emergency workers continued their search for the missing, and examined buildings to see if they were safe enough for residents to return today.

The centre of the devastated area - which looked more like war-ravaged Grozny or Beirut than a prosperous European town - was deserted except for emergency workers and the occasional stray dogor cat.

But as the implications of the disaster began to sink in, there was dismay that such an event could happen. As the news emerged that asbestos from the ceiling of the Grolsch brewery building caught by the blast may have spread in a black cloud to surrounding towns, local people were angry and bewildered by what increasingly seemed like an accident waiting to happen.

The warehouse, which contained fireworks produced in China, had been inspected and certified as safe only last Wednesday, although it was due to be closed in 2002. Until Saturday its safety recordwas good although, astonishingly, many residents did not know what was stored behind its doors.

One theory for the scale of the disaster was that workers had accidentally left open internal doors which might have contained the fire and subsequent blast. Theoretically such an explosion was highly unlikely because the fireworks were stored in bunkers specifically designed to minimise the risk. With two similar fires in the town recently, many suspect that an arsonist may be responsible. Diana Elias, a member of a local opera company, was unsure whether a colleague had survived and didnot mince her words: "If it is an arsonist, I hope he's dead," she said. For the most part, however, the town seemed determined to rally round, and its mayor, Jan Mans, praised citizens for their offers of help to the victims. Queen Beatrix too, was on hand to offer her support and condolences to those who had lost homes or loved ones.

The Roman Catholic Bishop of Utrecht, Cardinal AdrianSimonis, confessed that hewas lost for words adequateto describe his feelings. "I lived through the war, and I thought this was a war. It was like bombs had fallen. It was completely destroyed - streets and streets.

"I felt myself hopeless," he added. "They are asking what can the church do. I don't know what to say further, I say to them, 'I pray for you'. At the end, they have to go on with life."

The formal investigationinto the disaster is due to start today.