Workers march in protest after more than 100 people were killed in blaze at factory, which supplied C&A and Walmart

A blaze which killed more than 100 textile workers in a clothing factory supplying western high street brands was deliberately started, according to officials in Bangladesh.

As more details emerged of the lapses that turned the nine-storey factory on the outskirts of the capital Dhaka into a death-trap on Saturday night, companies including the European clothing store C&A and the giant US retailer Walmart admitted they had contracts with the owners for the supply of sweatshirts and other products.

Tuesday was an official day of mourning in the poor south Asian country. Hundreds of workers, some carrying black flags, demonstrated in the Ashulia industrial belt on the outskirts of the capital where the factory is located. They blocked traffic on a highway and vowed to avenge the deaths of their colleagues, witnesses said. "Never shall we give up demands for punishment for those responsible for the tragedy," one worker said.

The fire has put a spotlight on global retailers that source clothes from Bangladesh, where the cost of labour is low and regulation minimal.

Thorsten Rolfes, head of corporate communications for C&A Europe, said the victims of the fire and their families were "in our thoughts and prayers". The company said it had ordered 220,000 sweaters from the factory to be delivered to C&A Brazil between December 2012 and February 2013.

Walmart said the factory, owned by Tazreen Fashions, had been making clothes for the US retail giant without its knowledge.

Tazreen was given a "high risk" safety rating after a May 2011 audit conducted by an "ethical sourcing" assessor for Walmart, according to a document posted on the website of Tazreen's parent company, the Tuba Group.

Walmart said the factory was no longer authorised to produce merchandise for them but that a supplier subcontracted work to it "in direct violation of our policies". The retailer said it had stopped doing business with the supplier on Monday.

"The fact that this occurred is extremely troubling to us, and we will continue to work across the apparel industry to improve fire safety education and training in Bangladesh," Walmart said in a statement.

Bangladesh's interior minister, Mohiuddin Khan Alamgir, said a preliminary inquiry had concluded the fire was the result of arson. "We have come to the conclusion that it was an act of sabotage. We are finding out as of now who exactly the saboteurs are and all culprits will be brought to book," Alamgir said.

Earlier, the prime minister, Sheikh Hasina, said she suspected the fire was an act of sabotage but she did not identify any suspect or say why she thought the cause might have been arson.

However, Major Mohammad Mahbub, the fire department operations director, said investigators suspected a short circuit caused the fire. But he added that if the building had had even one emergency exit, "the casualties would have been much lower".

Survivors told the Guardian that factory managers had stopped workers from running out of the building when a fire alarm went off. They described how doors were locked, forcing trapped victims to jump to their deaths.

The managing director of the Tazreen Fashions factory, Delwar Hossein, said his company had taken every possible precaution to protect workers. The factory is one of around 4,000 in Bangladesh. The country annually earns about £12.5bn from exports of garments, mainly to the US and Europe. Earlier this year, more than 300 factories near the capital were shut for almost a week as workers demanded higher wages and better working conditions. Siddiq Ur Rahman, acting president of Bangladesh Garment Manufacturers and Exporters Association, said the families of the dead would receive 100,000 taka (£760) as compensation.