“We were just trying to do something good and get it up off the ground again and something like this happens,” he said. “I am literally devastated at what has happened. I can’t believe it.

“We had just got it up and running, and now it has burnt to the ground.”

The South Ward Road premises, which reopened under new management after holding company Scott’s Wine World Ltd went into liquidation, sustained severe damage in last night’s blaze.

A member of the public alerted Tayside Fire and Rescue to the incident around 11.20 after spotting smoke coming from the roof of the building.

Crews fought the fire for almost three hours, before finally bringing it under control just after 2.30 this morning.

Mr Dolan said he could only watch helplessly as the building burnt down.

“We were there for most of the night but there was nothing we could do but watch,” he said.

It is believed the blaze started in the upper floor of the restaurant, known as The Skyroom, before spreading to the lower floor.

Today the upper floor appeared to have been completely gutted and firefighters were continuing to dampen down the building.

Speaking to the Tele from the scene, crew manager Gillian McGhie said they had remained on site to ensure the building was safe.

A spokesman for Tayside Police said it was too early to determine the cause of the fire.

He added, “A full joint investigation involving Tayside Police, Tayside Fire and Rescue and the city engineer will start tomorrow to determine the full set of circumstances of the fire.”

A spokeswoman for Tayside Fire and Rescue said their investigation team was already on standby to help with the inquiry as necessary.

Mr Dolan said the future of the restaurant — which employs 14 — was now uncertain.

“The relevant bodies are making their inquiries so I am not sure what will happen next,” he said.

“That is a matter for them.

“I have been trying to sort out everything I can and let the staff know what has happened.”