"We were all confronted with a picture of devastation when we arrived," mayor Heiko Breithaupt told a news conference held in a nearby school, recounting his arrival shortly after the explosion at 9am local time.

Police said that their earlier belief that war munitions had been found on the scene had not been borne out on closer inspection.

In an indication of the scale of the blast, one firefighter told reporters that on rushing to the scene after the blast he found three people lying unconscious on the road outside.

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The blast had torn through one section of the five-storey building, causing damage on both the street and courtyard sides. The 50 people living there would all need to be rehoused, Breithaupt said, adding that the building's structural stability was currently being checked.

Officials believed the gas canisters, which may have been used to supplement the house's district heating, had caused the blast. Police were being assisted by specialist explosives teams.

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The area around the property was sealed off and nearby residents were evacuated, including children at a local nursery. None of the children was hurt, police said.

Photos showed a communist-era residential block with smoke rising from blackened, twisted window-frames on the second floor.

Blankenburg is a city in the hilly Harz district, in the eastern state of Saxony-Anhalt.