The inferno began just after midnight, waking neighbours with loud explosions and screams from the suburban house in the town of Logan, reportedly home to two families from Tonga and Samoa.

Three men escaped the blaze -- one suffering severe burns -- and were "traumatised beyond belief", said police Superintendent Noel Powers.

"Unfortunately we have got quite a number of people who appear to have died as a result of this fire... quite a significant tragedy is unfolding," Powers told reporters.

"What is readily evident is that it's a total and utter catastrophe, a tragedy beyond all proportions."

Queensland state Premier Anna Bligh said at least seven of the 11 dead were younger than 18, including one who was just three years old.

"We are talking about a number of very young children" said Bligh.

"I've spoken to one man this morning whose wife and five children are unaccounted for," she added.

"I don't think anyone could imagine the pain that that would involve."

Bligh warned that it could be days before the house was safe to enter, with rescue workers facing the grim task of identifying some of the bodies by dental records because they were so badly charred.

The cause of the fire is yet to be determined but Powers said it was not believed to be suspicious.

He said it was amazing that two people managed to get out alive.

"They will be able just to sort of give us those last terrifying moments and just hopefully help us put all the pieces of this together," he said.

"What's emerged here is just a big jigsaw puzzle. The pieces have to be put together and it's going to be a slow process."

Zachary Pearson, who lives close by, told the local media that he was woken by a loud bang around midnight and he and his parents rushed outside to find the house engulfed in flames.

"Within minutes, it was so big. It was too big for anyone to do anything. Within minutes the roof was gone. The only warning was just one big bang," he said.

An aunt and cousin of some of the dead, Elma Hiddleston, wept as she described turning on the television to see "it was their house. I just hoped they were going to survive.

"I watched them grow up. 11 people -- it is just too much for me," she said.

Logan Mayor Pam Parker said it was the single biggest loss of life the town had ever seen, describing it as devastating for the tight-knit community, where flags flew at half mast.

"I've got to admit I'm still in shock on hearing this and seeing the emotional outpouring on site, it's just heart-wrenching," said Parker.

There would be a prayer session for the families in the town on Thursday and Bligh said counsellors would be on hand at the children's schools to comfort their classmates as they received the news.

"This is a community in shock today," she said.

Copyright AFP (Agence France-Presse), 2011