Fielding admitted the killings of Kathleen Day, 76, her daughter-in-law Sandra Day, 50, Sandra's son Lee, 22, his children, twin girls Maddison and Rhiannon, aged three, and son Reece, two, and his girlfriend Yvonne Colverhouse, 17.
Richard Fielding, 21, of Walthamstow, east London, denied murdering members of the Day family, whose ages ranged from two years to 76 years.
But his pleas to manslaughter on the grounds of diminished responsibility were accepted at the Old Bailey on Monday. He is expected to be sentenced on Tuesday.
Fielding admitted the killings of Kathleen Day, 76, her daughter-in-law Sandra Day, 50, Sandra's son Lee, 22, his children, twin girls Maddison and Rhiannon, aged three, and son Reece, two, and his girlfriend Yvonne Colverhouse, 17.
Petrol in letter-box
They died in the early hours of 6 March last year when the three-storey family home in Bellamy Road, Chingford, north-east London, was set alight after petrol was poured through the letter box.
All the victims died after inhaling smoke. Lee and Sandra's bodies were found in the second floor bedroom where they had gone in a vain attempt to rescue the children.
The only member of the family to escape the fire, grandfather Brian Day, 52, who was rescued by ladder by neighbours from a first floor window before the windows were blown out by an explosion, sat at the back of the court.
He was joined by Kelly Himpfen, the 21-year-old mother of the dead children.
She had separated from Lee Day and the children were staying with him for the weekend.
Fielding denied the attempted murder of Brian Day and the Recorder of London, Michael Hyam, ordered the charge to remain on file.
Agonising decision
Orlando Pownall, prosecuting, said the decision to accept the defendant's plea of guilty to manslaughter but not guilty to murder had been a difficult one.
He said: "The prosecution agonised long and hard before accepting the pleas entered by this defendant.
"We sympathise and understand that our decision will not be met without reservation by those who have suffered and whose lives have been devastated by the behaviour of this defendant."
But a number of psychiatrists had agreed Fielding was mentally ill and there was no realistic prospect of getting a conviction for murder.
Mr Pownall said Fielding's precise motives remained unclear.
But he said Fielding suffered a severe hand injury during a burglary several years ago and held Lee Day responsible.
He believed the injury made him unattractive to women and felt Day had wrecked his dreams of being a top DJ.
It was a resentment which festered and eventually led to seven people, including three children, losing their lives.