Witnesses said that a flare or firework lit by band members may have started the fire.
Police Maj. Cleberson Braida told local news media that the 245 bodies were brought for identification to a gymnasium in the city of Santa Maria, at the southern tip of Brazil near the borders with Argentina and Uruguay
Television images showed smoke pouring out of the Kiss nightclub as shirtless, young male partygoers joined firefighters in wielding axes and sledgehammers, pounding at windows and walls to break through to those trapped inside. Teenagers sprinted from the scene desperately trying to find help -- others carried injured and burned friends away in their arms.
"There was so much smoke and fire, it was complete panic and it took a long time for people to get out, there were so many dead," survivor Luana Santos Silva told the Globo TV network.
Silva added that firefighters and ambulances responded quickly after the fire broke out, but that it spread too fast inside the packed club for them to help.
Michele Pereira, another survivor, told the Folha de S. Paulo newspaper that she was near the stage and that the fire broke out after band members lit flares.
"The band that was onstage began to use flares and, suddenly, they stopped the show and pointed them upward. At that point the ceiling caught fire. It was really weak but in a matter of seconds it spread," Pereira said.
Civil Police and regional government spokesman Marcelo Arigoni told Radio Gaucha earlier that the total number of victims is still unclear and there may be hundreds injured. Officials earlier said 180 were killed.
Rodrigo Moura, identified by the newspaper Diario de Santa Maria as a security guard at the club, said it was at its maximum capacity of between 1,000 and 2,000, and partygoers were pushing and shoving to escape.
Ezekiel Corte Real, 23, was quoted by the paper as saying that he helped people to escape. "I just got out because I'm very strong," he said.
The fire led President Dilma Roussef to cancel a series of meetings she had scheduled at a summit of Latin American and European leaders in Chile's capital of Santiago, and was headed to Santa Maria, according to the Brazilian foreign ministry.
"It is a tragedy for all of us. I am not going to continue in the meeting (in Chile) for very clear reasons," she said.
"Sad Sunday", tweeted Tarso Genro, the governor of the southern state of Rio Grande do Sul. He said all possible action was being taken and that he would be in the city later in the day.
Santa Maria is a major university city with a population of around a quarter of a million.
A welding accident reportedly set off a Dec. 25, 2000, fire at a club in Luoyang, China, killing 309.
At least 194 people died at an overcrowded working-class nightclub in Buenos Aires, Argentina, in 2004. Seven members the band were sentenced to prison for setting off the blaze.
A blaze at the Lame Horse nightclub in Perm, Russia, broke out on Dec. 5, 2009, when an indoor fireworks display ignited a plastic ceiling decorated with branches, killing 152
A nightclub fire in the U.S. state of Rhode Island in 2003 killed 100 people after pyrotechnics used as a stage prop by the 1980s rock band Great White set ablaze cheap soundproofing foam on the walls and ceiling.
AP-WF-01-27-13 1523GMT
232 people die in nightclub fire
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