City centre workers were left bewildered as fire swept through the Ofiveone building after a suspected arson attack.
Emergency services were called to the former Smokie Mo's bar, in the Ofiveone building on Brownlow Hill in Liverpool city centre, to reports of a fire at around 1.40am on Monday
A 22-year-old man has since been arrested on suspicion of arson, police have confirmed.
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Sections of Mount Pleasant and Brownlow Hill were both cordoned off by police this morning after a fire swept through the landmark Ofiveone building, which was once home to the famous nightclub.
Locals told the ECHO that the fire started in the old Smokie Mo's bar and then spread.
The exterior of the old pub was very badly scorched and the interior appeared to have been gutted by the fire.
A row of fire engines were parked up on Brownlow Hill alongside the nearby car park and police ensured the cordon was respected by the public.
A worker at a local frozen yoghurt and coffee shop told the ECHO that he struggled to get into work this morning.
Domiel, who runs 16 Swirls Fro-Yo on Mount Pleasant, said: "We did not know what was going on. We really struggled to open up this morning. It's just chaos out there, I have no idea what has gone on. It's a bit worrying to be honest."
Naz, who works at Mega News on Mount Pleasant, said: "I came in at 7am this morning. A police officer came in and said there had been a bad fire in the building across the road. He said it was arson. "
A guest at the nearby Adelphi Hotel who asked not to be named said: "Yes it was a bit scary. We saw all these blue flashing lights in the street and smelt smoke. I think we were just relieved that it was out there and not in here. "
Investigators from the fire service arrived at the scene at around noon today, and could be seen discussing the fire with police.
Contractors then arrived and began work on boarding up the front of the old Smokie Mo's pub building.
Fire crews were in the process of leaving the scene this afternoon.
A spokesperson from Merseyside Fire and Rescue Service said: "Fire has been suppressed and substantially locked down, as conditions within the building improve, the Fire Service are currently scaling down the high volume pump in order to aid traffic management provided by Liverpool City Council.
"Crews are working hard to turn over and damp down in sector one with smaller pockets of fire being tackled by firefighters in breathing apparatus. Firefighting will continue on until the blaze is extinguished.
"Engineers on scene continue to isolate the electrical supply to the building.
"Following multi-agency meetings throughout the incident, our attendance has been reduced to 8 fire engines, with the intention to scale down further to 6 appliances."
A Merseyside police spokesperson said: "We have arrested a man following a suspected arson in Liverpool City Centre in the early hours of this morning, Monday 4 October.

"At around 1.40am, officers on patrol became aware of smoke coming from a building on Brownlow Hill, formerly the bar Smokie Mo's.
"Merseyside Fire and Rescue Service (MFRS) remain in attendance. A man was detained nearby.
"Road closures remain in place. Please avoid the area where possible.
"A 22-year-old man of no fixed abode was detained on suspicion of arson and has been taken into custody for questioning.
"Anyone who witnessed the incident or anyone acting suspiciously in the area is asked to contact us via @MerPolCC or anonymously on 0800 555 111, with reference 21000687770."
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