The Glenorchy Rd has now been reopened to traffic as firefighters dampen down a large fire which earlier threatened homes and cut power to the town

The fire is now largely under control and there are currently five helicopters in the air dampening the area down.

Although the road has been reopened, users are asked to proceed with care and allow extra time for their journeys.

"Investigations into what caused the blaze will begin tomorrow, however at this stage it is too early to say how it started," a Queensland Lakes District Council spokesman said.


Police were working with the Fire Service to investigate the cause of the fire, which spread over about 150ha on Jessie Peak.

Initial indications suggest it started on the lake's edge by Rat Pt, a popular camping area accessible by vehicles and boats.

Anyone who was around the Rat Pt area has been asked to speak to authorities.

Power was cut to Glenorchy at the northern end of Lake Wakatipu, where its normal population of nearly 400 was swelled by holidaymakers.

About 50 firefighters and several helicopters with monsoon buckets battled the blaze, which started below the Glenorchy-Queenstown Rd.

The operation was expected to last for three to five days.

It went up the slope, jumping the road as it burned through trees and scrub, the Queenstown Lakes District Council says.

No evacuations had been necessary, but residents of Bob's Cove and Closeburn Station were alerted earlier in case they had been required to leave.

It could take several days to fully extinguish the fire but the council hopes the road will be reopened this afternoon, a spokeswoman said.

Queenstown Water Taxis will be ferrying people to and from Queenstown today.

There is a full house at Mrs Woolly's campground, about 25km from the blaze but many people cannot now leave as planned.

"They can't go anywhere, but that's just life, there's plenty to do here! We'll survive, that's just what happens in Glenorchy," campground manager Grant Dunstan said.

The fire danger in Queenstown Lakes District is high and incident controller Phil Marsh - the principal rural fire officer for Otago - said the fire was a sharp reminder of why open air fires are currently banned.

The Otago Rural Fire Authority would like to hear from anyone with any information that may help the investigation on 0800 673 473.