Two New Zealand athletes and a team physio were among those evacuated from Kiwi House when a fire broke out this morning.
All three - who have not been named - escaped without injury just moments before two gas bottles exploded.
It is thought the gas bottles were attached to a barbecue at the pop-up bar built for the Olympic Games in central London, behind King's Cross Station.
Around 300 people were forced to flee the venue when the blaze broke out at around 7.20pm local time (6.20am New Zealand time).
Eyewitnesses said a chef noticed flames around the outdoor grill moments before the explosion, and alerted the supporters of the danger.
They said he yelled for people to flee the site, and then kicked down a wall and led them to safety.
Minutes later flames had engulfed the venue, which was packed almost to capacity.
Brook Johnstone, 55, from Port Waikato, told TV ONE's Breakfast: "I looked around and the gas bottle had a little flame around it.
"The cook was trying to put it out and the flame just got bigger so I just said 'Let's get out of here'.
"We got inside and everyone was evacuated."
Luke James said he saw a little bit of smoke, flames and then he heard "a big bang".
"There were people screaming and running, literally thought there was a bomb going off, and all we could tell was that people were leaving in a hurry."
He said it was frightening, people were jumping over fences and it was "absolute madness, pandemonium".
Olympic medal winners including rowers Eric Murray, Hamish Bond and Mahe Drysdale have all visited the temporary bar during the Games.
The blaze broke out just metres away from where silver-medallist Valerie Adams was sitting with her coach, manager and most of her family the night before.
The noise generated by the explosions alerted many nearby, and attracted the attention of a number of media outlets.
International media, gathered in London because of the Games, quickly reported on the huge fire.
The UK's Telegraph, BBC, and The Guardian all covered the story, as well as the Washington Post and the Huffington Post in the US, Russia's RIA Novosti and The Australian, bringing the fire to their country's headlines.
The blaze also became a hot topic on Twitter as people posted messages and photographs of the explosion online.
Among those fleeing the flames, Leah Evans, tweeted: "Collecting our belongings, shocked to see the damage, kiwi house...burnt down."
On Facebook Todd Beaumont said: "Full credit to the staff, security and bar staff at Kiwi House, serious situation recognised quickly and very well handled.
"It was a sad sight to see and experience but could have been a much worse situation. Well done to all involved keep us patrons safe."
Similarly Liz Ebrey, posted: "Bigs up to staff, they were very efficient about getting us all to safely."
The London Fire Service kept everyone updated with regular tweets, the first of which said: "If you heard a bang in Kings Cross it was due to 2 gas cylinders exploding before we arrived at the BBQ fire at the back of Kiwi House, N1."
It later tweeted: "The BBQ fire at rear of Kiwi House is out. We're cooling 2 cylinders that were involved in the fire. 300 people evacuated, no one injured."
The NZ Olympic Team moved quickly to assure everyone at home that patrons of the garden terrace venue were safe, posting on Twitter: "Friends and family of New Zealanders in London please note everyone at Kiwi House is safe and was quickly evacuated after a fire in the outdoor area this evening."
But it wasn't long before the messages on the social network site turned to barbecue and hangi jokes, among others.
On a Facebook thread on the topic, Alice Groves posted: "Our NZ team is obviously smokin' hot!"
Another Kiwi supporter Stephanie Battersby, wrote: "Dats coz our NZ team has been on fire ths olympics yeehaa lol."
Others debated whether the Aussies would try to replicate the fire "in a more spectacular fashion", or whether in fact the fire was started because "someone let an Aussie near the barbie".
On a topical note, Ann Johansen posted: "Opps ...might have been a safer way to replicate Tongariro blowing her top ... but hey us Kiwi's never do anything in halves."
Kiwi House was set up by the New Zealand Olympic committee as a place where supporters could go to meet their Olympic medallists and watch the action together.
The medal winners were due to visit later this week, but it's now unclear if the venue will be ready to welcome them.
With only four days to go until the Games close there is little time to recreate the backyard attraction, or even find a new venue to replace it.