More than 240 houses were burned down in a fire that started in the early hours of Saturday at the ancient town of Dukezong in Shangri-la, a resort county in southwest China's Yunnan province.

Firefighters battle the fire at the Dukezong ancient town in Shangri-la, a resort county in Southwest China's Yunnan province early Saturday. The fire broke out at around 1:30 am and was under control as of 2 pm. According to the local government, a total area of 40,000 square meters, with 335 households, was affected by the fire. 242 houses were destroyed.The economic loss is huge, the infrastruture was ruined, a great many of cultural remains, thanka were lost in the fire.[Photo/icpress]

China Daily learnt that the blaze was brought under control by 2 pm. However, firefighters warned of the danger of flare-ups. No casualties or injuries have been reported so far and the cause of the fire is being investigated.

According to local government, the fire razed an area of 40,000 square meters, with 335 households affected and 242 houses destroyed.

Officials estimated the economic loss to be enormous, reportedly reaching 100 million yuan ($16.5 million). The fire destroyed many cultural relics, such as the Tibetan paintings, or thanka.

“All the valuable things we’ve had for a thousand years are gone,” said Drakpa Keldan, a hostel owner in the old town who lost both his hostel and restaurant. "Now we have nothing, except the prayer wheel."

Dukezong has the world's largest Tibetan prayer wheel. It was saved, largely because it is made of metal.

The local government has set up a temporary shelter to host victims who lost homes. More than 2,600 people were sheltered in three hotels outside the old town.

An investigation committee has started to investigate the cause of the fire and tally the losses of individual families.

Officials said the fire started from a little shop near the center of the old town. Police received the first report at 1:27 am and about 2,000 firefighters rushed to the scene, including rescue teams from Lijiang and Dali who arrived during the night to support the battle against the blaze.

They had their work cut out not only because the wooden structures in the town were extremely flammable, but also because water had frozen in the pipes due to the cold, hindering rescue.

Dukezong, meaning “town of the moon” in Tibetan, was built 1,300 years ago and became an important landmark on the Southern Silk Road. It became one of the most renowned resorts in Shangri-la, famous for its well-preserved ancient Tibetan dwellings.

Xinhua contributed to this story.