At least 181 people have died as the worst bushfires in Australian history scorched the southeastern state of Victoria, but the toll is expected to rise beyond 200 as more bodies are found, officials say.

Police said that two people had been arrested for suspicious behaviour in relation to the fires but did not specify any possible charges against them, nor even confirm whether arson was involved.

However, there is growing public outrage here that some of the blazes were maliciously lit.

"We're sure that the fire in Churchill was deliberately lit," Victorian Police Commissioner Christine Nixon told Nine Network television, referring to one blaze in which 21 people died.

"And we have now been given some information that makes us suspicious about the Marysville fire," she said.

Marysville, a picturesque town of some 500 people 80 kilometres (50 miles) northeast of Melbourne, was reduced to ash and officials have warned that the death toll there of 15 could rise to 100 as more bodies are found.

"As we've gone to Marysville to investigate we've, along with fire experts, become suspicious about how the fire actually came into Marysville, the direction it came from, the pace it came with," Nixon said.

Heatwave temperatures approaching 50 C (122 F) combined with strong winds and tinder-dry scrub to produce a firestorm Saturday that destroyed more than 1,000 homes and razed 450,000 hectares (1.1 million acres) of bushland.

Cooler weather and calmer winds Thursday eased fears that two big fires in Gippsland east of Melbourne could meet and turn into one huge conflagration, but 21 fires continued to rage in the region.

"Because it's cool, (there is) a little moisture in the air, the winds are very low, the weather conditions have been very favourable for what we have been trying to achieve," environment department spokesman Stuart Ord said.

"The weather's going to be reasonably cool and calm today and for the next few days," Ord told the national AAP news agency.

He said firefighters who have been struggling non-stop against the flames since the weekend were taking the opportunity to marshall equipment near the fire-front and dig containment lines designed to slow the fires' advance.

"It gives us a window of opportunity now to do some good work," he said.

Some 3,000 firefighters, many of them volunteers, are trying to bring the fires under control before they reach more towns or threaten energy and water infrastructure servicing Melbourne, a city of more than three million people.

Police have launched the largest arson investigation in Australian history, warning that anyone believed to have caused fatal bushfires faces a 25-year jail sentence for murder.

Prime Minister Kevin Rudd has said any arsonists proven to have started a blaze would be guilty of "murder on a grand scale" and should "rot in jail."

Nixon also confirmed that police had received reports that more fires had been deliberately lit even as firefighters battled to bring the killer blazes under control and news of the huge death toll dominated the media.

"We certainly have had reports of other fires being lit," she told Channel Seven television Thursday.

"You and I would just be staggered by that, but that's what we're certainly seeing. We've been investigating those as well."

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