Air Carrier Flight Attendant reported a smoke event during cruise caused by improperly configured spare Lithium Ion batteries in a passenger's carry-on backpack. Flight Attendants extinguished the fire while the Captain executed a safe diversion.

Narrative

Passenger was standing in [the] aisle holding his backpack up and smoke was coming from it; I grabbed fire containment bag; called Captain. Gave containment bag to another passenger; former Pilot/now Corporate Pilot; to take to cabin area where there was smoke Non revenue Flight Attendant seated [who] sprang into action; opening the containment bag. I grabbed halon; PBE and passed it to nonrev pilot who had come forward. Aft Flight Attendant had come forward with halon; had turned lights to bright and instructed pax to stay low because of smoke. I gathered water; juices to wet containment bag. Passed cans to a deadheading Flight Attendant; who had come forward; to take to fire area. Made a PA to have aft Flight Attendant to bring additional water forward. I had only a limited supply. We then formed a human chain passing passenger water bottles to area. Lithium ion batteries were smoldering. Items placed in containment bag and secured in a cart in aft galley. Called Captain to advise fire was out and was advised we were landing in ZZZ. Met by fire / rescue. Taxied to gate without further incident. Firefighters boarded and removed items.Passenger had a host of batteries; chargers; vapes; liquid vape juice. There should be stricter regulations and limits imposed on vaping devices allowed on airplanes.