As police hunted arsonists blamed for some of the fires, authorities said more than 1,800 houses were razed by the worst wildfires in the nation's history that killed at least 181 people in southeastern Victoria state.

The scale of destruction had emerged as more resources including military planes were engaged in the damage assessment and clean-up operation across a vast area of farms and eucalypt forest, he said.

Heatwave temperatures approaching 50 deg C combined with strong winds and tinder-dry scrub to produce a firestorm that razed some 450,000 hectares on Saturday.

Authorities expect the death toll to rise beyond 200 as more charred ruins are inspected for bodies, especially in the town of Marysville northeast of Melbourne where about 100 people are feared to have died.

A new fire warning for nearby Healesville was downgraded after traumatised residents spent the night preparing to defend their homes again from flames and embers bursting out of the surrounding bush.

But they were told to remain vigilant due to a 'high level of fire activity.' 'People in the area need to remain alert as there may not be a warning should conditions change unexpectedly,' the Country Fire Authority said.

Healesville resident Adam Menary told national radio that people in the town were anxious. 'It's a pretty tough time for people,' he said.

About 20 wildfires were still burning across Victoria but firefighters were taking advantage of cooler conditions to work on fire containment measures, and most threat warnings have been lowered.

Victoria police chief Christine Nixon said investigators were closing in on arsonists accused of lighting at least one of the deadly blazes, as scores of officers continued the largest arson investigation in the country's history.

A suspect was being questioned over the bushfires but had not been charged with any crime, a police spokesman said.

But he could not confirm media reports that a 39-year-old man from Churchill, a rural town in the fire zone, would appear in court later Friday charged with arson.

Two men questioned in relation to the Churchill fires on Thursday were released the same day without charge.

Ms Nixon has said the Churchill district fires were clearly the work of arsonists and the blaze that flattened Marysville was also being treated as suspicious.

Millions of dollars were pouring into a Red Cross relief fund as newspapers continued to fill their pages with tales of survival, grief and desperation from families returning to the warped and charred remains of their homes.

Australian actor Nicole Kidman and her husband, country singer Keith Urban, pledged A$500,000 (S$496,000) to a Red Cross relief fund through a fundraising telethon broadcast on the Nine Network overnight.

A Red Cross spokeswoman said almost AS$66 million had been raised for the relief fund through public donations, but 'many millions more' had been pledged through the telethon and corporate and government donations. -- AFP