Prosecutors in Taiwan charged the owner of an events company Friday over an explosion at a "colour party" which left 12 dead and hundreds injured after heat from stage lights triggered a blast that ripped through the crowd.

Nine people were under investigation over the disaster in June at the Formosa Fun Coast water park, just outside the capital Taipei, when clouds of multi-coloured corn starch sprayed on revellers ignited.

But prosecutors said Lu Chung-chi, the owner of Color Play Asia which organised the event, must take responsibility for the incident.

Lu was charged with negligence leading to death and injury and faces up to five years in prison, prosecutors said.

"The temperature of the lights was very hot and when the powder came into contact (with the lights) it caught fire," said prosecutor Chen Hsi-chu, spokesman for the prosecutors' office in Taipei's Shihlin District.

"He (Lu) should have been aware of this. He knew of the risk."

Chen said an investigation showed the hottest parts of the stage lights hit temperatures of more than 1,000 degrees Celsius, while the powder's ignition point was just 500 degrees Celsius.

The corn starch was sucked into the lighting system, ignited, and flames then shot out of the lights' ventilation ports, Chen said.

The event, which drew around 1,000 people -- mostly between 18 and 25 years old -- turned into a nightmare when the inferno ripped through the crowd. Horrific video footage showed people running for their lives and screaming as they tried to escape.

Almost 500 partygoers were injured, more than 200 of them seriously, some with third-degree burns covering more than 90 percent of their bodies.

In the weeks following the disaster, the death toll rose as 12 victims succumbed to their injuries.

Specialists from around the world were flown in to help with treatment and perform skin grafts.

Five months later, 71 of the injured are still in hospital, 10 of whom are in a critical condition.

The eight other suspects under investigation, including both the chairman and president of the water park, were cleared of any charges.

A court date for Lu has not yet been set, prosecutors said.