Dozens of workers jumped to their deaths and more than 100 were injured when a fire swept through a Bangladeshi factory that makes clothes for high street retailer Gap today.

Witnesses said the blaze – at the factory just outside Dhaka – engulfed the multistorey building, forcing some of those trapped inside to leap from the windows. The fire comes after repeated warnings about fire safety at factories making clothes for western retailers.

Authorities said that the fire initially broke out on the building's 10th floor, where trousers were stored for shipment, and then spread up to the 11th floor where there was a canteen and a manufacturing facility. At least 27 people died in the blaze while one witness said that he saw 50 to 60 people jumping off the 10th floor to escape.

Abdur Rahim, who was injured, said most of the workers were having lunch when the fire broke out. "Heavy plumes of fire suffocated the area." He said two of the emergency exits were closed. Unable to walk down, many broke the windows to escape the fire and injured themselves.

Simon McRae, senior campaigns officer at the anti-poverty charity War on Want, said: "This latest tragedy in a factory owned by a firm which supplies UK stores underlines how workers risk their lives to make our clothes."

The factory was owned by local business giant Hameem Group in the Ashulia industrial zone, 18km outside Dhaka.The Hameem Group has two production complexes at the site, which employ about 12,000 people. The fire broke out in a building where around 6,000 people work.

Sunil Kumar Sarkar, a director at the company, said: "Since it was lunch time, most of the people were out." Hameem Group makes clothing for a number of leading brands but Sunil added: "We are yet to identify the brands that this particular factory had in stock."

A spokesman for Gap confirmed that the factory supplied clothes to its stores, adding that the company was "terribly saddened" by the fire.

"Our immediate priority is that the workers and their families receive the medical and emergency assistance they need," he said. " We have dispatched a team from our company to assist on-site and to ensure that a complete, independent investigation occurs immediately."

The spokesman added: "For more than 15 years Gap Inc has worked to bring fair and safe working conditions to factories around the world. We conduct periodic, unannounced audits of factories to ensure safety, and we were on-site in April and August at this factory. Among the many requirements of our Code of Vendor Conduct is that there are regular fire drills and other safety measures in place.''

The Bangladesh government and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have formed two committees to investigate the fire. The home affairs minister, Sahara Khatun, said one would submit a report within seven days.

The company and the BGMEA said they would provide 100,000 takas (£868) in compensation to each family of the dead and pay for the treatment of the injured.

Workers' safety in the rapidly growing textile industry has been a major concern in recent years but the association said that it had improved.

However, labour rights groups say safety standards are still inadequate in many factories. In February, a fire at a sweater factory just outside Dhaka killed 21 people and injured dozens.

Bangladesh has about 4,000 garment factories that export over £6.3bn worth of products a year, mainly to the United States and Europe. Recent protests by low-paid garment workers have gripped the country. Workers demanding the implementation of a new minimum wage clashed with police at an industrial zone in southeastern Bangladesh on Sunday, leaving up to three people dead and 100 hurt. Smaller protests have taken place around Dhaka. On Sunday, workers in the capital blocked a busy road and set two vehicles on fire, police said.

Garment workers in Bangladesh are among the lowest-paid in the world, according to the International Trade Union Confederation, a Vienna-based labour rights group.