Twenty-five people were injured, some critically, after a fire broke out in an alley behind a North Point apartment block early yesterday.
About 70 people at Continental Mansion, at the corner of King's Road and Cheung Hong Street, were evacuated.
A guesthouse on the third floor was damaged in the blaze.
Yu Chung-keung, the fire department's divisional commander for Hong Kong East, said it was believed that construction debris in an alley caught fire and spread up bamboo scaffolding and mesh covers surrounding the building.
Seven of the injured were in critical condition in hospital and six were serious, most as a result of smoke inhalation.
Many victims - dazed and shaken, with their faces blackened by ash - waited on the footpath for medical help.
Several of those injured were tourists who had been staying at the guesthouse.
Some residents were evacuated to a nearby church and the Causeway Bay Community Centre in Fortress Hill, while others waited in the building's lobby.
"We entered the hallway and it was full of smoke, so my husband and I had to wrap our faces with wet towels. It was quite scary," said a sixth-floor resident who was forced to wait in the lobby for five hours before being allowed back into her flat.
Third-floor resident Vitorino Dias said he heard a loud bang before realising a fire had broken out. He alerted a friend on the same floor and they escaped together.
Dias, who was shaken but uninjured, said the fire escape had been blocked by rubbish. The scaffolding was scheduled to be removed on Friday.
Chiu Kim-sum, chairwoman of the building's owners' committee, said the committee had repeatedly complained to the Home Affairs Bureau in the last three years to stop issuing guesthouse licences.
Although the guesthouse affected was licensed, the committee claimed it violated the building's deed of mutual covenant.
Chiu said the building had many guesthouses, and urged the government to restrict licences and to impose stricter regulations. "The building is crowded because of so many tourists," she said.
The Home Affairs Department's licensing authority said it had received complaints against the guesthouses in the building. It raised five prosecutions against the guesthouses and five people were convicted.