A huge fire on Friday destroyed a Bangladesh garment factory supplying key Western brands, authorities said, in a blaze touched off by workers angered over rumours of a colleague's death in police firing.

Garments are a vital sector for the South Asian nation, whose low wages and duty-free access to Western markets have helped make it the world's second-largest apparel exporter after China.

But a series of deadly incidents, including an April building collapse that killed more than 1,100 people, has triggered global concern over weak safety standards in the $22-billion garment industry.

There were no initial reports of casualties in Friday's fire, which gutted a ten-storey building at Gazipur, 40 kilometres from the capital, Dhaka. Fire fighters were battling to put out the fire in four adjacent buildings.

"We are still struggling to control the flames," said fire official Mahbubur Rahman, adding that 22 fire service and civil defense units from Dhaka and nearby areas were scrambled to fight the fire.

A Reuters photographer at the scene said burnt garments strewn on the floors bore brand names from US retailers such as American Eagle Outfitters Inc, Gap Inc and Wal-Mart Stores Inc.

Other brands on the clothes included Li and Fung Ltd, Marks and Spencer Group PLC, Sears Canada Inc, Fast Retailing Co Ltd's Uniqlo and Inditex S.A. brand Zara.

The factory was among the ten biggest in the country, said Mohammad Atiqul Islam, president of industry body the Bangladesh Garment Manufacturers and Exporters Association.

With the factory destroyed, workers there stood to lose their jobs, he added. "Now all the workers are at risk of becoming jobless," he said.

As many as 18,000 people worked at the factory, its owner, Mosharraf Hossain, told Reuters. But they had left the building by 11 p.m., shortly before the fire started.

A police official in charge of the area dismissed as baseless the claim that a worker had died in the firing, adding that a group of workers assisted by locals had set the fire.

"We are investigating to find out the reason for this heinous act," said Mohammad Kamruzzaman, the officer in charge of the Joydevpur police station that guards the area.

Police and witnesses said tempers flared after a mosque loudspeaker announcement of a worker's death in police firing to disperse a road blockade by workers who had skirmished with police near the factory on Thursday morning.

Police broke up that clash with tear gas, but hundreds of workers gathered later, vandalised the factory, set two buildings on fire, and blockaded the road, said Mushfiqur Rahman, a manager at Standard Garments, a firm in the building.

Police had to fire shots in the air to break up the workers' blockade and let in fire fighters, he told reporters.

The recent string of accidents in Bangladesh has put the government, industrialists and the global brands that use the factories under pressure to reform an industry that employs four million people and generates 80 per cent of export earnings.