Firefighters called to an apparent blaze at Blackpool Tower said it was actually orange netting that was seen.
Witnesses spotted "flames" coming from a metal section near the top of the famous landmark at about 14:15 GMT.
Lancashire Fire and Rescue Service (LFRS) deployed 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.
"A specialist team from Lancashire Fire and Rescue Service gained access and confirmed that there was no fire.
"This incident was supported by the National Police Air Service, who used thermal imaging which provided further assurance."
LFRS originally said it had 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.