The explosion ripped through the Liaoning province club, killing at least 25 and injuring 41, including eight young girls holding a birthday party and pedestrians outside the building.

"The explosion was so powerful that there must have been about one tonne of explosives," the Beijing News quoted an investigator as saying.

The owner of the club, who was killed in the blast, had secretly stored the explosives in a vault in the township of Tianshifu, which has 300-400 licensed or unlicensed small coal mines, the newspaper quoted local residents as saying.

"The boss of the club was quite rich and ran a coal mine as well," a local resident surnamed Liu told the newspaper.

The explosives were TNT made by a nearby factory and police also found detonators at the site, the Beijing News said.

Pictures showed the two-storey building was completely levelled and several cars were buried under the concrete debris.

The entertainment club comprised a bathhouse and a karaoke bar, where 13 young girls from a local department store were attending a birthday party at the time of the blast and eight of them died, the Beijing News said.