Kerryann Easton, 24, told the Court of Session in Edinburgh yesterday that she had been sleeping moments before an inferno broke out in her grandmother's home in Alloa in February 2009.
Miss Easton, who is unemployed, told advocate Dorothy Bain QC that she woke up surrounded by flames. Her friend Erin McNeil, 23, was asleep in an upstairs bedroom.
Miss Easton added: "I got myself into a bit of a panic and I ran into my gran's living room. I ran outside because I thought Erin would be outside but she wasn't there."
Miss Easton, also of Alloa, Clacks, was giving evidence during legal proceedings in which her former friend, Miss McNeil, is suing her.
When Ms Bain asked Miss Easton whether she was responsible for causing the fire to break out in the house, the witness replied: "No."
Lawyers acting for Miss McNeil are pursuing a damages claim against Miss Easton after the fire on February 15, 2009. It is claimed in the case that the accident was caused by Miss Easton's fault and that she failed to keep a good look-out while cooking food which is denied.