Northumbria Police said the group – 11 boys and three girls – were arrested on suspicion of manslaughter after the incident in Gateshead on Friday.
Officers were called to reports of a fire near Fairfield industrial park in the Bill Quay area shortly after 8pm.
Emergency services attended, and the fire was extinguished a short time later.
In a statement, the force said: “Subsequently last night we issued an appeal for missing boy Layton Carr – it was believed he was in the area at the time.
“Sadly, following searches, a body believed to be that of 14-year-old Layton Carr was located deceased inside the building.”
Carr’s next of kin have been informed and are being supported by specialist officers, police added.
Detective Chief Inspector Louise Jenkins, of Northumbria Police, also said: “This is an extremely tragic incident where a boy has sadly lost his life.”
She added that the force’s “thoughts are with Layton’s family as they begin to attempt to process the loss of their loved one,” and asked that their privacy be respected.
A cordon remains in place at the site of the incident.
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