Several reports were made about a suspected gas leak in Rawtenstall at the start of December, but it was more than two weeks before repairs began.
The explosion, which sent flames shooting 50ft in the air, occurred as engineers finally started their repairs on Monday morning.
Electricity had been restored to most affected homes in the Rossendale Valley by last night, but 18,000 remained without gas - and families faced the prospect of being unable to heat their homes or cook over Christmas.
Local people close say there had been reports of a gas-like smell for some time. Laura Morris of Holmeswood Park said: "I could smell a bad smell for about three weeks on the estate, so I rang for an engineer to come out and check.
"He said not to worry about it. He said there was a major gas leak, but they were getting around to fixing it. He said it would be ok."
The explosion is believed to have been caused when leaking gas was ignited by an electricity pylon. It started a huge fire that knocked out electricity and gas supplies, along with landline phones to surrounding areas, and forced the closure of the busy A56 Edenfield by-pass and the evacuation of 200 homes in Rawtenstall.
An investigation into what happened has been launched by the Health and Safety Executive.
National Grid, which is conducting its own probe into what went wrong, admitted that a leak at the facility was first reported on December 6 but insisted the explosion was linked to the repair work which took place on Monday.
A spokeswoman said engineers did not believe the leak required immediate action but had monitored gas levels at the facility until they were able to start repairs.
Specialist tools
A spokesman said: "We received a report of a gas leak on December 6, but it involved a gas main, and we needed specialist tools and equipment which at the time were not available.
"This was the same leak we were working on when the explosion happened. The location was safely away from properties, the gas was leaking into the atmosphere, and there was no danger to the public."
Although electricity has been restored, the authorities have warned that there is a risk that the supply will not hold. An army of 200 gas engineers are working frentically to restore supplies to every home before Christmas Day.
Council bosses are appealing to residents to check on vulnerable neighbours who may be elderly or infirm. An emergency relief centre for those evacuated from their homes has been set up at a local day centre.
Police patrols were stepped up across the area to deter criminals who may be tempted by the prospect of easy pickings from insecure homes.
Chief Insp Jeff Brown said: "Obviously, we would repeat our normal crime prevention advice for this time of year, which is all about making sure people's home and valuables remain safe and secure. This is particularly important while services like electricity and gas remain disrupted."
Families whose homes were not affected by the power problems were urged to switch off their Christmas lights to help ease the strain on supplies. United Utilities said it would help them distribute electricity more efficiently to customers while supplies were down. Tweet

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Accidents happen....there are worse off people in the world this Christmas !
Accidents do happen but some could be avoided and this is one of them. No matter what excuses are given they new about this leak for at least two weeks before doing anything and they should have known that the risk was there from the pylon, we all know that pylons cause sparking. Whoever decided to leave this should be sacked and prosecuted for endangering public life.
Steak.... Think about what you write first please. Firstly, i doubt it was the pylons that ignited the leaking gas. (that would have to be one powerful blast of gas to be ignited at that height), Secondly, a leak is a leak. You cannot forsee where or when that may occur, otherwise, it wouldn't be a leak in the first place. And finally, one could argue that all accidents are avoidable. One thing is for sure, no accident is intentional.
It is most unwise and dangerous to lay a gas main in the vicinity of a high tension electricity line. There are two reasons for this ,one it increases the possibility of corrosion in the gas pipe line and secondly when a leak occurs the potential for igniting the gas is greater. There needs to be a comprehensive investigation of this incident by fully independent engineers , totally unconnected with National Grid. This team could also advise on how to prevent
such accidents in future.
Alan Rigby Marr