Austria is observing two days of national mourning, with black flags flying from the Vienna State Opera and Austrian flags flying at half-mast on government buildings.
Emergency workers began examining victims trapped in the tunnel, near the ski-resort of Kaprun, late on Sunday, a police spokesman said.
But the delicate process of removing the bodies will not begin until Monday.
"It is now clear that identification of the victims will not be possible using conventional means," the Governor of Salzburg Province, Franz Schausberger said.
Most are from Austria, Germany, Japan and the US.
Contrary to earlier reports, British officials now say they have no information to suggest UK citizens are among the dead.
At least 33 of the dead are believed to have been local government employees and their families from the Austrian town of Wels, who were on an office outing.
Austria is observing two days of national mourning, with black flags flying from the Vienna State Opera and Austrian flags flying at half-mast on government buildings.
Investigators believe the fire may have started before the single carriage train entered the 3,200 metre tunnel.
"We have received information that the light of a fire was already visible to outside witnesses as the train was entering the tunnel," Austria's public security chief, Erik Buxbaum, said.
Most of dead managed to escape from the carriage, but were overcome by fumes as they fled, investigators believe.
The blaze "spread at a raging speed, like in a chimney," Mr Schausberger said.
Firefighters on Sunday said they saw melted rubber from ski-boots on the metal rungs of the esape ladders.
Twelve people escaped by breaking out of the back of the train and running away from the flames and smoke.
"My only thought was to get out. I was able to save myself at the last moment because a window was kicked in and I could fight my way outside," a survivor told the Austria Press Agency.
The Foreign Office in London has issued two emergency numbers in Austria for people concerned about relatives.
Extinguishers denial
The cause of the fire, on a train powered by cable and with no engine on board, remains a mystery.
"There were two fire extinguishers, one in the front and in one in the back," he said.
And the head of the rescue operation, Manfred Mueller, denied the train might have been carrying inflammable substances.
"Dangerous substances like diesel would be transported by a special train," Mr Mueller said.
The Kitzsteinhorn railway has been operating since 1974. The 9 minute long journey takes skiers up 1,500 metres to an altitude of 2,400 metres along 4km of track.
A fire in the Mont Blanc tunnel between France and Italy in March, 1999, killed 39 people, prompting a wave of concern over tunnel safety.
Two months later another Alpine tunnel was hit - this time the Tauern tunnel near Salzburg, killing 12 people and injuring 50.
Inspectors who visited 25 major tunnels around Europe after the Mont Blanc blaze found that nearly a third of them had poor safety features.