Liverpool’s mayor, Joe Anderson, said the blaze started in a Land Rover on the third level of the multi-storey car park – and police believe this caused other vehicles to ignite.
There were periodic explosions and flames shooting up the outside of the building as the cars inside burned.
Merseyside Police have described the fire as accidental, adding: “We believe that all vehicles parked in the car park have been destroyed and advise owners to contact their insurance companies.
No one has been seriously injured, but crews still trying to contain the blaze have been hampered by strong winds.
A reception centre has been set up nearby for people who are unable to get home.
The huge blaze next to the Echo Arena, which is on the city’s waterfront, forced organisers to cancel the Liverpool International Horse Show.
Horses which were on the first level of the car park when the fire broke out were moved into the arena.
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Nearby buildings – including some apartments – were evacuated because of smoke billowing from the fire.
Crews were first called to the car park at 4.42pm and were on scene eight minutes later.