Fire crews were called to the beached ship at 4.20am, to deal with a 'large blaze' in two trucks which were still in the cargo hold.
Demolition crews are believed to have been using cutting equipment when sparks set fire to the trucks.
Five fire engines, together with Lancashire Fire and Rescue Service's mobile fire station, were sent to ship which is beached at Anchorsholme.
Up to 30 contractors working on board were evacuated.
Police sealed off the area and Operation Merlin - the special procedure launched when there is a potential risk of environmental damage and pollution - was put in place.
Steve Milner, crew manager at Bispham Fire Station, said firefighters were in a race against time to put the fire out.
The Coastguard was called to prevent members of the public getting near the ship while emergency services dealt with the fire.
Police said it was now a case of "sitting and waiting" and they were confident the fire would burn itself out.
Riverdance ran aground on January 31 after being hit by a freak wave.