More than 40 firefighters were called to tackled the blaze at Funky Fun House in Mercers Row, Abbey, on Friday night.
An investigation is under way to establish the cause of the fire and arson has not been ruled out.
Firefighters from Cambridge, Cottenham, Burwell, Chatteris, Gamlingay, Linton, Ely and St Ives were called at 10.42pm and found the fire was already well developed.
Crews remained at the scene throughout the night to ensure the area was safe and the fire was fully extinguished.
The blaze has ruined plans to open a children’s nursery at the site and has forced the cancellation of children’s parties due to take place over Easter.
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