Hundreds of people were evacuated from the area around the former Lewis's department store on 19 January 2012 after a gas supply pipe was damaged during demolition work inside the building.
Merepark Construction, the contractor overseeing the project, was prosecuted by the Health & Safety Executive (HSE) after an investigation found that it had failed to warn its demolition subcontractor about the live gas supply.
Liverpool Magistrates' Court heard that Merepark had been hired as the principal contractor for the multi-million-pound project to convert the building on Ranelagh Street into a new hotel, shops and offices as part of the Central Village development.
A gas supply pipe, which was clearly visible entering the building's service duct from street level, was damaged by falling debris during demolition work, causing a two-inch hole in the pipe.
After one worker smelt gas, the emergency services evacuated the area due to the risk of a major explosion. The city's busiest train station, Liverpool Central, was closed for most of the afternoon along with shops and local businesses.
The court heard that Merepark Construction had arranged for the pipes, which led from the gas meter into the building, to be disconnected but had failed to take any action to either disconnect the gas supply to the meter or to protect the four-inch supply pipe from demolition work.
Merepark Construction, of Garden Lane in Altrincham, was found guilty of two breaches of the Health and Safety at Work etc Act 1974 by failing to ensure the safety of workers or the public following a trial at Liverpool Magistrates' Court.
The company, which is in voluntary liquidation, was fined £30,000 and ordered to pay £8,490 in prosecution costs.
Speaking after the hearing, HSE inspector Catherine Willars said: "The gas supply pipe could clearly be seen entering the service duct from the street but Merepark Construction failed to take any action to disconnect it, protect it from falling rubble or to warn the demolition firm of the dangers.
"A single spark could have set alight the leaking gas and caused a major explosion in the city centre, with the potential to put dozens of lives at risk.
"Luckily the emergency services' response worked effectively and they were able to prevent an explosion but the incident caused significant disruption and hit the income of local businesses.
"Merepark was the principal contractor on a major refurbishment project but its safety standards fell way below the legal minimum on this occasion."