A fire that caused extensive damage to Rotorua's Ideal Electrical has been blamed on faulty smoke alarm batteries.

Specialist fire investigator Bay of Plenty Coast Jon Rewi said he had determined the cause of the fire on Depot St, just after 5pm on Monday.

"It's an interesting one. It was faulty smoke alarms - well, it was the batteries inside the smoke alarms."

Mr Rewi said the 9 volt batteries had come into contact with each other, created heat and caught fire.

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He stressed it was a particularly "freaky fire" and should in no way deter people from using smoke alarms.

"The fire was in the shop area where there was stock and the building itself has been damaged extensively.

"The staff had just knocked off for the night and it was just fortunate the fire service was only a few metres down the road."

Branch manager Allan Wilson did not wish to comment.