An inquest heard that Philip Braithwaite had intended to kill his whole family in the blaze.
He had researched ways to do it on the internet. Philip died in the house and daughter Jessica died in hospital the next day.
Her mum, Christina, managed to escape to raise the alarm, but their other daughter, Catriona, who has cerebral palsy, suffered severe injuries in the 'inferno'.
Teesside Coroner's Court was told how 49-year-old Mr Braithwaite had disconnected the smoke alarms and brought a petrol can into the house in Redcar.
On the night of the fire Christina was watching television in a downstairs living room and her husband started the blaze in the children's play room.
Catriona and Jessica were upstairs in different bedrooms.
In a statement to the court, Christina said she became aware of the fire at about 11.30pm in a hallway.
"As I walked out I was greeted by what I can only describe as an inferno," she said.
"There was a wall of fire that appeared to reach the top of the door which completely filled the doorway with thick, acrid, black smoke gushing out of the room which was choking me.
"I was hysterical, I shouted out 'what the hell have you done?' I couldn't understand how a fire could have got so big and intense so quickly.
"I ran towards the stairs and tried to go upstairs but was immediately choking on the smoke and couldn't go up."
She then grabbed her mobile, rang 999 and ran into the street shouting 'the kids are in there'.
Christina said her husband began suffering mental health problems about nine months before the fire.
He ran his own consultancy, but after falling ill in 2010 he struggled to cope and ran up £17,000 of debt on credit cards.
Christina said: "Up until July or August 2010 I would describe Philip as being a good husband and a wonderful father. He was a fantastic dad who really adored the children."
During his illness he spent six weeks in a mental health unit and had made two suicide attempts.
Pathologist Dr Nigel Cooper told the hearing both dad and daughter died as a result of smoke inhalation.
Assistant deputy coroner Clare Bailey recorded the verdicts that Mr Braithwaite killed himself and Jessica was unlawfully killed.
What a tragedy!