The fire, which engulfed the entire 28-storey building after welders accidentally set scaffolding and foam insulation material alight on November 15, touched a raw nerve in the city, giving rise to suspicions of official corruption and negligence.

As well as those who died, 126 were injured in the blaze and 16 are still in a serious condition in hospital.

Witnesses said victims' families had arrived very early in the morning, while Shanghai Communist Party secretary Yu Zhengsheng and Mayor Han Zheng also paid their respects to the dead.

Occasional small groups of family members were still arriving in the mid-afternoon and were escorted through the crowds by police, but by that time the event had become dominated by members of the public.

'It has been going on since 6am,' said one local resident. 'I have never seen crowds like this. If it's not tens of thousands of people, then it's hundreds of thousands.'

Around 120 people were passing the building every minute, according to one reporter's observations, suggesting well over 50,000 people visited the building over the course of the day. Even in the evening, the crowd was steady, though less than half of that during the day.

Huge crowds taking to the street in such a manner is a rare sight on the mainland, and the government is nervous about allowing mass demonstrations of any kind.

Shanghai authorities were taking no chances the memorial procession could escalate into a protest and deployed a heavy police presence. Upwards of 600 uniformed police were stationed along the roads and kept the crowds in close check.

Streets were closed to traffic for several blocks around the building, and about 800 metres of cordons and railings - which appeared to have come from the former World Expo site - corralled mourners into a one-way procession route.

Several thousand other people stood watching on the street corner opposite the building - a spot which has been drawing large crowds every day since the fire.

Many of the mourners carried black-and-white posters of a ribbon of mourning and bearing the bilingual message 'Don't cry, Shanghai. Mourn the victims in Shanghai's Jiazhou Road fire.'

A group of young graphic designers said they had produced the posters as an act of mourning. 'We printed 1,000 copies to distribute to the public,' said one, who asked not to be named. 'This is not just in memory of the individuals who died here, but also because the fire has really touched the lives of everyone in Shanghai.'

But as well as marking their respect for the dead, many in the crowds were using the ceremony as a form of silent protest against the government corruption and incompetence they saw as being to blame for the disaster.

The building was being retrofitted with external insulation at the time of the fire as part of a government pilot scheme to improve energy efficiency.

Questions have been raised about the allegedly cosy relationship the subcontractor, Shanghai Jiayi Building Decoration Engineering, seemed to enjoy with the Jingan district government.

Shanghai Jiayi is understood to be a state-owned entity controlled by local authorities, but the district government has refused to reveal the exact nature of their relationship.