The president of the Salzburg district court, Walter Grafinger, told journalists that a combination of factors led to the horrific accident.
Presenting the report compiled by five experts, he said that the heater's ventilator in the driver's cab had either become stuck or was blocked.
(Click here to see diagram of accident)
Leaking hydraulic oil from a cable trickled into the heater and the surrounding area where it then ignited, he said.
Mr Grafinger said that the aim of the report was to clarify the cause of the tragedy and not assign blame. But its findings could influence the outcome of legal actions brought by the victims' relatives.
Responsibility
American class action lawyer Ed Fagan, who led a compensation campaign for Holocaust survivors, is representing relatives in actions against the train's operators and around 20 other firms which could be held responsible for the incident.
The train burst into flames in the tunnel which goes up to a glacier on the Kitzsteinhorn mountain.
Only 12 people survived. They had been at the rear of the train, which was packed with skiers, and fled to safety by smashing through windows.
The other 155 were trapped inside as the doors would not open.
Among the many personal tragedies was the loss of 32 people from the same Austrian town, Wels.
They had been on a municipal outing.
Another victim was German junior skiing champion Sandra Schmitt , who died along with her parents.
The Kaprun disaster brought the safety of funicular trains in Austrian resorts sharply into focus.
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