Some of the 20 residents in Kesteven Walk, Eastgate, were forced to jump out of windows and clamber down scaffolding as thick, black smoke filled the building.

Neighbours rushed to the aid of the distraught occupants and put up ladders to help some of the desperate residents escape.

One man braved the flames and smoke to go back into the burning building to get his family out safely.

The drama began at about 12.30pm when the fire is thought to have been deliberately started near the entrance to the newly refurbished flats.

Fire crews said the billowing smoke could be seen from more than half a mile away, and they arrived at the scene to be faced with three people hanging out of the windows crying for help.

One family told of their terror as they escaped the fire from their top floor flat.

Sarah Wilkinson was making sandwiches for her son and niece in the flat of her parents, Kevin and Veronica, when she heard screams ringing out.

She said: "I was so scared, all I heard was someone calling 'fire'. I dialled 999 from the flat as my dad went to open the door. All we could see was thick black smoke.

"My first thought was get the kids out, dad grabbed my son Ricky and I grabbed my niece and we ran down the stairs. And immediately afterwards my dad went back into the flats to help mum, who is disabled, get through the thick black smoke."

Mrs Nighet Hussein, who spotted the smoke and called the fire service, said: "I came round the corner and was blinded by the thick black smoke. It's awful this has happened."

No one was seriously injured in the blaze but three people were treated for smoke inhalation at the scene by ambulance crews.

Fire crews from Dogsthorpe, Stanground, Peterborough Volunteers, Yaxley and the turntable from Dogsthorpe fought the blaze.

Fire crew manager Greg Brown said: "We saw the flames were well above the height of the buildings so we knew it was serious but we quelled the fire very quickly and managed to stop the flames from spreading."

Today, a spokesperson for Cambridgeshire Fire and Rescue said the blaze had been started deliberately when refuse bags were set alight. Station manager Martin Boone said: "It is extremely lucky that no one was seriously injured or killed."

Related: Breaking news, 6 July: Residents flee fire