Dozens of firefighters, including some called in from other parts of Cambridgeshire, spent hours battling the fire, which broke out in the bar area of Praise, in New Road, close to the city centre, causing "significant damage".
Neighbouring buildings in the leisure complex at the heart of the city's night scene, have also suffered smoke damage, including Liquid nightclub and Lakeside Superbowl.
Fire service investigators remained at the scene today searching for clues to determine the cause, with help from police scenes of crime officers and sniffer dogs trained to detect flammable substances.
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Investigation as blaze is confirmed as arson, 7 October 2008.--------------------------
Station manager Andy Dunlop said potentially suspicious circumstances were being looked into.
He said: "The cause of the fire is being investigated fully by specialist investigators from both the fire service and the police."

Firefighters outside Praise restaurant in Peterborough. Picture: Ben Davis.
"This was a serious fire which has had a big impact on a major centre of Peterborough's night-time economy.
"It is fair to say that none of the buildings in the complex will be open today, and it is doubtful that the restaurant will open for many months."
Eleven fire crews from Peterborough, and as far afield as Crowland, March and Huntingdon, were called to the blaze, after smoke detectors were set off at about 3.45am.
Firefighters from Dogsthorpe were the first at the scene, and arrived to find thick smoke pouring from the building, but were initially unsure exactly where the blaze had broken out.
Mr Dunlop said: "We deployed 18 firefighters into the building with breathing apparatus and thermal imaging equipment. There was smoke coming from all corners.
"Visibility was zero and access to the building was a problem. But we were actually able to locate the source of the fire relatively quickly because of the equipment."
The fire was under control within 45 minutes, but crews were still damping down at the restaurant several hours later.
Directors of the restaurant – formerly known as Toho – who have been running it for less than six months, say they are devastated by the blaze.
Fire officials say it is still too dangerous for them to be allowed into the building, and they have no idea how long it will be before it can be reopened.
Owner Zillur Hussein said: "We worked really hard on the venue, and this was supposed to be the time when we wanted to see the rewards.
"We had plenty of big bookings for Christmas and were expecting a busy few months. It's devastating. I don't know what else to say."
Director Colin Doherty added: "We know there is quite a lot of damage. It looks like quite a significant fire. We are all very upset about what has happened.
"We only hope we can get things up and running again as soon as possible."
BREAKING NEWS 8.25AM: Firefighters and police are at the scene of a blaze at city centre restaurant and bar Praise
Fire is believed to have started in the main bar area of the venue, in New Road, Peterborough, in the early hours of today.
General manager at the neighbouring Liquid & Envy, Geraldine Young, said: "We would like to confirm that Liquid, Envy, Chicago Rock Cafe and New York New York have not been affected by the recent fire and will be trading as normal this weekend."
The full article contains 590 words and appears in Peterborough ET newspaper.