Contractors hired to demolish five of the abandoned complex's derelict buildings in Preston city centre have ruled out an electrical fault sparking the fire.
"There's no power in the place any more, so the only explanation is someone must have got in and started it," said Ayub Bapu, project manager for the scheme to build apartments and town houses on the site of the old orphanage and Mount Street Hospital.
"And we'd cleared out all fire risk materials like timber and old mattresses. So it looks very much like it's been started deliberately.
"If it's kids, or rough sleepers, or urban explorers, they've really put themselves at great risk, because the place is extremely dangerous."
The blaze started on the third floor of a crumbling building which demolition teams were already due to begin dismantling on Monday. It spread to the roof and firefighters needed two aerial ladder platforms to attack the flames from on high.
Mr Bapu said the structure was already in a precarious state before the fire, with rotten floors, broken staircases and empty lift shafts.
Yet keeping out intruders had become a long-term issue with chains and padlocks regularly snapped with bolt-cutters.
"I'm not pointing the finger at any group, I just know we’ve had all sorts of problems trying to prevent people getting in," he said.
"I can't understand why they'd want to break into a dangerous derelict building and risk their lives just to have a look around.
"We had meetings with the fire brigade and police during the night and they said they were 95 per cent sure there was no-one trapped inside.
"They couldn't go in there because of how dangerous it was, so they couldn't be 100 per cent certain. But they were sending in a sniffer dog to check the place out just in case."
The battle to keep out intruders has been going on for almost 20 years since the former orphanage, care home and private hospital were vacated.
Several groups of "urban explorers" have visited and filmed their exploits for social media. Vandals have carried out numerous attacks on the buildings, scrawling graffiti on walls of the former chapel and setting small fires. And rough sleepers have regularly been found inside the buildings.
"We are just relieved that the tower and chapel have not been affected by the fire because they are listed buildings and are being retained in this project," explained Mr Bapu.
"It's really annoying because the owner has done everything humanly possible to keep the place secure. It's probably cost him around £100,000 and it's been a constant fight to keep them out.
"I've changed the locks on the doors about five times and we've put thick chains in there, but they cut them with bolt croppers.
"Some are just kids. The police last night said they'd have to wait and see if anyone phoned up to report their child missing in case there really was someone trapped up there. I gather they didn't get any calls, so we can assume no-one was in.
"No-one knows how it started. It's a mystery really. But I think it's got to have been intruders.”