Military exercises possible cause of Australian fires

Australian fire officials say the threat to the Blue Mountains west of Sydney "has been averted" for the day, but warn the crisis is far from over.

New South Wales Rural Fire Service Commissioner Shane Fitzsimmons said residents would be able to return to their homes.

But he warned that fresh challenges lay ahead in the coming days amid unfavourable conditions.

In total, 73 fires are burning across the state, 29 of which are uncontained.

Meanwhile, a fire service investigation has concluded the largest of the fires in the Blue Mountains - State Mine near Lithgow - was caused by explosives training at an army range at Marrangaroo last Wednesday.

The defence department has not yet commented on the findings, but acknowledged at the weekend that it could have been the cause.

The findings have angered Blue Mountains Mayor Mark Greenhill who said the army "should not have been firing" on such a hot, dry day.

Hundreds of homes have already been destroyed as more than 3,000 firefighters battle to contain the bushfires in Australia's most populous state.