Neighbours and emergency services rushed to the home - where the man, a woman and seven children lived - in Lalor Park in Sydney's west after it was engulfed about 1am on Sunday.
But NSW Police allege attempts to rescue the three children, their four siblings and their mother were "frustrated" by the father who tried to block access.Â
Forensic officers are examining the scene to determine which accelerant started the blaze. (Mark Evans/AAP PHOTOS)
Eventually, two boys, aged three and six, were taken from the home to Westmead Hospital in a critical condition where they died a short time later.
The body of the third child, a 10-month-old girl, was found after firefighters extinguished the blaze.
Four other children - a nine-year-old girl and three boys aged four, seven and 11 - were treated at the scene by paramedics and taken to hospital in a stable condition.
The mother, 29, suffered smoke inhalation and was also taken to hospital where she is under sedation.
The father, 28, inhaled smoke and was burned and is now in an induced coma under police guard in hospital after being arrested at the scene.
The catastrophe is being treated by detectives as a domestic-related multiple homicide.
Homicide Squad Detective Superintendent Danny Doherty described the deaths of the three children as "terrible and tragic", saying police would allege the father intended to "keep the kids inside the premises".
"We're alleging that this man did certain actions to prevent the rescue of those young lives," he told reporters.
"There were direct actions taken ... keeping police, other first responders and neighbours out of the property while it was on fire with the intention of keeping the kids inside the premises."
Seven children were at the home when the fire broke out in the early hours of Sunday morning. (Mark Evans/AAP PHOTOS)
NSW Fire Rescue Superintendent Adam Dewberry said it was a confronting scene.
"Going to a house fire you are always expecting the worst and hoping it won't be - but this was pretty confronting, absolute chaos," he told reporters.
NSW Police Acting Superintendent Jason Pietruszka said the survival of the four children and their mother was down to the heroic efforts of neighbours and officers, some of whom suffered minor injuries.
"It's completely and utterly devastating for people who know the family, that go to school with the other children - it's a close-knit community and this will have a long-lasting impact," he told reporters.
While Mr Pietruszka was unable to confirm reports the man was armed as he allegedly tried to stop others from entering the home, it would be part of the investigation.
A dog trained to detect accelerants was at the scene on Sunday to help crews work out how the fire started.
The three dead children are yet to be formally identified.
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