Firefighters called to reports of a blaze at Blackpool Tower said it was actually orange netting that was seen.
Witnesses spotted what they said were "flames" coming from a metal section near the top of the tower at 14:15 GMT.
Lancashire Fire and Rescue Service (LFRS) sent six fire engines and a "rope rescue" team to the scene.
Staff were evacuated from the 129-year-old tower but LFRS said a specialist team gained access to the area and confirmed there had been no fire.
A statement posted on X, formerly Twitter, read: "Lancashire Fire and Rescue Service were called to Promenade, Blackpool today by concerned members of the public, due to a combination of factors that led them to believe it was a fire.
"The area where the fire was suspected is generally inaccessible, therefore access to this area is difficult."
It added: "This incident was supported by the National Police Air Service, who used thermal imaging which provided further assurance."
People were told to stay away from the area
Firefighters were supported by a police helicopter near the towerLFRS said it had sent six fire engines, the drone team and the "rope rescue" team in attendance at a fire on the Promenade.
Lancashire Police said the top of the tower was currently closed for renovation and difficult to access.
"Our helicopter has flown over the tower and there is no fire," it said.
The force confirmed what could be seen was "orange netting".
The force said one man was arrested on suspicion of breach of the peace near the scene.
A Blackpool Tower spokesperson said: "We can confirm that the fire brigade... have established that there is no fire.
"Our well-rehearsed emergency procedures were implemented, and we can confirm that what looked like a fire from a distance was in fact lights on a reflective netting surface at the top of the tower."
Built between 1891 and 1894, the tower is 519ft (158m) high and is a Grade I listed building.
Inspired by a trip to Paris in 1889, former Blackpool mayor Sir John Bickerstaffe had the idea of building a Lancashire version of the Eiffel Tower.
Blackpool Tower
ALBERT EDEN©BLACKPOOL COUNCIL HERITAGE SERVICESBlackpool Tower took three years to build- The total cost for its design and construction was £290,000 (which equates to about £30m in 2023)
- Sir John Bickerstaffe even chipped in £2,000 (that's about £210,000 in today's money)
- The tower's architects were Maxwell and Tuke of Manchester, both of whom died before its completion
- There are more than five million bricks in the tower
- The structure contains 2,493 tons of steel and 93 tons of cast iron
- More than 3,000 people visited the tower on its opening day - 14 May 1894
- From the top of the tower you can see the Lake District, the Isle of Man and North Wales on a clear day
- The original ballroom opened in August 1894 - the the present version - seen on the BBC's Strictly Come Dancing - was designed by Frank Matcham and opened in 1899
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