Police and fire chiefs are blaming arsonists for nearly half of the 100 bushfires that have destroyed homes and wildlife, and forced mass evacuations in Australia's most populous state this week.
As the infernos - some now in their sixth day - continued to raze hundreds of thousands of acres of land in New South Wales, police set up a task force to gather information on a number of fires they considered suspicious.
Rural Fire Services Commissioner Phil Koperberg said there were as many as 40 fires that could not be explained and may have been deliberately lit. Authorities have said lightning strikes caused some of the fires, which have caused more than Aus$7 million in damages.
The acting state premier, Mr Andrew Refshauge, said arsonists would be punished with the sternest penalties possible including prison terms of up to 14 years and fines as high as $17,000.
In the Sydney suburb of Heathcote some 1,000 people were forced to evacuate overnight on Christmas Day but they were able to return home yesterday.
Mr Pat Kennedy, who lives in Heathcote, said: "The fire was spitting burning embers into the backyard and on the roof. Today, it's snowing ashes."
The fires started late last week in rural areas and quickly spread, fanned by sweltering temperatures and high winds. They have cast a pall of smoke and ash over the state capital, Sydney, and many are burning in the city's fringe suburbs. No deaths or serious injuries have been reported.
Yesterday, fires were burning in a ring from Yamba, 420 miles north of Sydney, to Eurobodalla, 175 miles to the south and to Narromine, 250 miles to the west.
The largest concern was a fire in the south of the Blue Mountains that stretched 15 miles wide, Fire Commissioner Koperberg said. The blaze had the potential to destroy homes in several townships across the mountains, 50 miles west of Sydney.
Firefighters are hoping for some help from nature, with a small chance of rain on Sunday night, he said.
Authorities have said 150 homes have been destroyed and thousands of animals such as koalas and kangaroos have died. Most of the world's second-oldest national park, on Sydney's southern fringe, has been wiped out.
About 4,000 people have been evacuated as the fires burn around Sydney, some less than 15 miles from the city centre. Major roads and rail services have been cut by the fires and about 12,000 homes are without electricity.
Residents in suburbs south of Sydney were urged to boil their drinking water after the bushfires affected water filtration systems. The risk to Canberra, which on Christmas Day was also encircled by fires, eased with only three major fires continuing to burn in suburban areas. Temperatures dropped and winds eased after four days of horrific conditions.
Meanwhile, Mr Refshauge said New Year's Eve celebrations around Sydney Harbour would go ahead. There had been some "concern" at whether it was appropriate to hold celebrations because of the fires and also because of the September 11th attacks in the US.
Banks said they were accepting donations for bushfire victims and Mr Refshauge urged revellers to donate something before celebrating. The Prime Minister, Mr John Howard, said the government would contribute $350,000 to disaster relief.