Five protesters and a police commando died in a blaze at a building in central Seoul on Tuesday where authorities moved in to break up a protest by tenants and activists fighting against planned demolition and seeking better compensation.
"The fact that there were losses of lives is truly heartbreaking," Lee, was quoted as saying at a meeting with his senior staff members, according to officials who were present.
"This type of thing must not happen again," said Lee, who took office a year ago and has seen his support rate fall to about 20 per cent in recent weeks with respondents saying they are frustrated with what they see as ineffective leadership.
After the incident, hundreds of people held a violent protest against what they called ‘police brutality’ late into Tuesday night in scenes reminiscent of months-long street rallies against Lee's unpopular decision to reopen the country to US beef.
Newspapers from the political left and right in editorials on Wednesday criticised the police for what the country's biggest daily, the Chosun Ilbo, called a ‘deadly overreaction’.
Tuesday's clash came two days after Lee replaced his police chief who was heavily criticised for his handling of the previous protests that erupted under Lee.
Prosecutors have started work on an inquiry into the deaths and are expected to question both protesters who were led away from the scene and police officers.
The protesters had occupied the building demanding more compensation to vacate the property, which is in an area planned for demolition as part of a major development project.
Lee reshuffled his top economic officials on Monday, replacing his widely criticised finance minister, to speed up measures to stop Asia's fourth largest economy from sliding into its deepest recession in 11 years.