An ancient Tibetan village in the popular tourist area of Shangri-La in China's southwest Yunnan province has been partially destroyed in a giant inferno, state media reported Saturday.

The fire, which began at about 1:30 am on Saturday, destroyed more than 100 traditional wooden houses after it tore through the streets in the ancient Tibetan village of Dukezong, Xinhua news agency said.

More than 1,000 firefighters and volunteers were deployed to tackle the blaze, which was still spreading by mid-morning Saturday after windy weather hampered efforts to bring it under control, local authorities in Yunnan said.

Photos posted on local news sites showed gigantic flames, some more than ten metres high, devouring an entire neighbourhood and casting a huge orange glow in the dark while emergency services battled to control the blaze.

No casualties have been reported so far, the news agency said, after inhabitants of the village were evacuated.

The cause of the disaster is still unknown but the damage is expected to exceed 100 million yuan ($17 million) according to the Chinese news portal Zhongguo Xinwen Wang.

Dukezong, which translates as "town of the moon" in Tibetan, was founded 1,300 years ago and became an important stop on the Southern Silk Road, according to Xinhua.

Earlier this week another high-profile site of Tibetan culture, the Buddhist Serthar institute located in the nearby province of Sichuan, was also the victim of an inferno, with ten buildings destroyed.