An arsonist could have been responsible for a blaze which swept through the old ballroom of the derelict Bermudiana Hotel on Christmas morning, it was revealed yesterday.

A Police spokesman said: "Because of the seriousness of the incident, there was the possibility that there has been some arson, but that hasn't been determined yet.'' Fire Service experts are still probing the blaze which swept through part of the derelict Bermudiana Hotel early on Christmas Day.

It is understood fire crews at the scene discovered evidence that the fire may have been started deliberately.

The emergency services were alerted after a passing taxi driver spotted the blaze just after 5 a.m. and called the emergency services.

More than 30 firefighters, some wearing breathing equipment, and a total of 11 fire service vehicles responded to the emergency call around 5 a.m. on Monday morning. Men and machines came from Hamilton and were reinforced by units from Southampton.

And, fearing vagrants were using the main hotel building to sleep in, fire crews fought a desperate battle lasting more than two hours to stop the blaze spreading from the ballroom at the north-east end of the building to the main hotel.

A Fire Service spokesman said: "Aggressive firefighting was necessary because it was made known to us that vagrants use the hotel to sleep in and shelter from the weather.

"The fire was really going and only some excellent work by the crews at the scene prevented it spreading further.'' But he revealed a thorough check of the hotel found that there were no people in it.

The Fire Service spokesman added that none of the firefighters involved were injured in the blaze.

But he said: "It could have been more serious. The hotel was empty -- if it had been full of furniture, it would have been much worse.

"And if it had spread, who knows what might have happened.'' The first fire teams at the scene were hampered because there was no power at the hotel and no access to water supplies.

But hoses were run down to Hamilton's harbourside and sea water used to bring the fire under control.

The hotel was gutted by fire in 1958, was rebuilt and finally closed its doors in the late '80s. It has lain derelict ever since, although the site is earmarked for a massive multi-million dollar hotel and business centre.

Former UBP Senator Michael Winfield, president of developers Bermuda Financial Centre Ltd (BFCL), which is behind the plan, could not be contacted for comment last night.