Surviving residents of Marysville, where up to 100 more people are feared killed in Australia's bushfires, are still being kept out of town to shield them from traumatic scenes there, authorities said on Wednesday.

The rising death toll in Australia's deadliest bushfires now stands at 181, but could exceed 200, authorities say. If the Marysville deaths are confirmed, the toll may reach 300.

A firefighter who drove through Marysville only 10 minutes before the firestorm hit on Saturday night said people banged on the side of his water tanker, begging his team to help people trapped in burning houses.

"The toll is going to be massive," fireman John Munday said.

Victoria state Premier John Brumby said Marysville, which has been off-limits since the weekend fires, would remain so because of the likelihood of ghastly sights in the once idyllic town.

"There are still many deceased people in homes," he said, adding between 50 and 100 may be dead in Marysville.

"If people return to those areas ... and there are still deceased persons there ... the impact would be quite devastating." Forensic police sifted through ash and the twisted remains of houses in Marysville, Kinglake and other towns razed by fires trying to identify the hundreds killed.

"You have to go street by street, house by house. There are many houses that have collapsed," said Victoria state Police Commissioner Christine Nixon, adding it would take weeks to complete the search.

Some of those killed were burnt so badly by fires that reached four storeys high they may never be identified.

"In some of these cases, it will be weeks before positive identification can be made and, I'm advised by the coroner, it may be virtually impossible to officially identify the bodies," Brumby told reporters.

The fires tore through rural towns north of Melbourne on Saturday night, fanned by strong winds and heatwave temperatures. Melbourne's temperature on Saturday hit 46.4 degrees Celsius (115.5 degrees Fahrenheit), a record for the city.

The disaster area, more than twice the size of London and encompassing more than 20 towns north of Melbourne, has been declared a crime zone. The fires have burnt 1,033 homes and left 5,000 people homeless.

More than 4,000 firefighters are still battling some 33 fires in Victoria state, with 23 of those still out of control.

Two major fires east of Melbourne are threatening to join and if so would pose a major risk to water and gas from the Thompson Reservoir and Longford gas plant, which supply Australia's second largest city. Hundreds of kilometres of control lines were being built to keep the fires apart, fire officials said.

"We continue to be in a fire crisis," Prime Minister Kevin Rudd told parliament.

Police have launched the nation's biggest arson investigation, "Operation Phoenix", and posted a A$100,000 reward for information leading to the conviction of anyone for deliberately starting a bushfire.

The tragedy is the worst natural disaster in Australia in 110 years. The previous worst bushfire was the Ash Wednesday fires of 1983 that killed 75 people.

The fires have increased pressure on the prime minister to take firm action on climate change as scientists blamed global warming for conditions that fuelled the disaster.

Australia is particularly vulnerable to climate change because of its hot, dry environment, but dependent on coal-fired power, Rudd has set a target to cut overall greenhouse gas emissions by only 5 percent by 2020.

Australia is the most fire-prone country on earth, scientists say. Most of its bushfires are ignited by lightning. Fire officials monitor lightning strikes and any fire that does not correspond with a strike is assumed to be started by people, either accidentally or deliberately.

Victoria has ordered a Royal Commission of Inquiry to probe all aspects of the bushfires, including safety guidelines.

Officials say the golden rule of surviving forest fires is to evacuate early or stay and defend their homes, but experts say that it appears many victims panicked and fled at the worst time. Some were incinerated in cars as they tried to outrun the flames.

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