The fire had spread over 9 ,500  hectares ( 23,500  acres) since it was started by a transport helicopter landing light that ignited grass in a national park south of Canberra on Monday afternoon, authorities said.

The fire was downgraded from emergency level to the second level on a three-tier danger scale overnight, but it remained out of control, the Emergency Services Agency said.

The village of Tharwa was under threat on Tuesday with drifting embers starting spot fires ahead of the fire front. Emergency services personnel knocked on doors in Canberra's southern suburbs on Tuesday night telling residents to prepare in case they had to evacuate.

Authorities have warned Canberra that the fire poses the greatest threat to the city of 420,00 people since 2003, when an inferno killed four people and destroyed almost 500 homes in a single day.

More than a dozen Tharwa residents chose to stay and defend their homes rather than evacuate, Tharwa Country Store owner Kevin J effer y said.

"We're pretty comfortable that we've got some good support here," Jeffery said, referring to Canberra firefighters deployed in the village.

Army Lt. Gen. Greg Bilton said military helicopters involved in supporting firefighters would no longer use their landing lights after sparking the blaze during a reconnaissance mission.

"It's important that we continue our operation in support of emergency services," Bilton said.

Canberra's airport was temporarily closed last week by a wildfire that threatened homes on its northern fringe. That fire has been extinguished, but the southern fire is expected to burn out of control for weeks.

Fire conditions are forecast to worsen across much of drought-stricken southeast Australia with temperatures forecast to rise in the coming days.

A unprecedented fire season has claimed at least 33 lives since September, destroyed more than 3,000 homes and razed more than 10.6 million hectares (26.2 million acres).