Scores of mourners placed flowers and burned incense on Tuesday for the one-year anniversary of the worst fire since 1949 in China's commercial hub of Shanghai, which killed 58 people.

The fire engulfed a downtown residential block, injured 71 and became a focus of public anger.

A government investigation showed welders working for an unlicensed company accidentally ignited nylon netting around the 28-storey building, which was being renovated to improve energy efficiency.

But the fire -- Shanghai's worst since the founding of the People's Republic of China -- also raised questions about the close relations between the contractors and authorities in the district where the building was located.

Former building residents, relatives and others gathered in a fenced-in area outside the derelict building to place wreaths and offerings for the dead, such as food, on a makeshift altar under the watchful eyes of police.

One former resident, overcome with grief, cried for several minutes. "My heart feels heavy," she told AFP.

Another woman, who declined to be named, said she had come to mourn her cousin Wang Fang who lost her life in the fire.

"We came to remember her," she said. "The government is unfeeling," she added, referring to the dispute between the government and families over compensation.

Some 57 families have accepted compensation offered by the local government for their destroyed homes, but more than 100 are still holding out, the state-run Global Times newspaper reported Tuesday.

Shanghai jailed 25 people over the disaster and handed out administrative penalties to 28 officials for responsibility for the fire, it said.

Gao Weizhong, head of construction in Shanghai's central Jing'an district where the fire occurred, was found guilty of abuse of power and accepting bribes for awarding building contracts, and jailed for 16 years.

In a commentary, the official Xinhua news agency blamed the disaster on bad management and weak enforcement of safety regulations.

"This is a human disaster that could have been avoided," it said.