Fire crews continue to work hard fighting a fire raging in Wanaka this morning, after a long night in which dozens of homes were threatened.

Firefighters from Wanaka, Dunstan, Arrowtown and Luggate have been working throughout the night to douse a large grass fire.

At 3am, police and emergency services were preparing to evacuate people from up to 30 homes, as well as those staying at the Wanaka Kiwi Holiday Park.

The evacuation was to have been a precaution measure, thanks to a wind shift.


"However, conditions had changed again and as at 4.30am, the fire was not burning towards houses,'' the Otago Civil Defence and Emergency Management team said.

Helicopters were brought in at first light today to resume fighting the blaze at Mt Roy and a new ground team joined the effort.

The fire started yesterday afternoon and burned about 160ha by nightfall.

Principal rural fire officer Graeme Still said: "The fire danger in this area is extreme, so we are continuing to take a very cautious approach.''

Members of the public are warned to stay away from the area as there is no public access to the Mt Roy Track and Spots Creek Track today.

The Otago Daily Times reports that although the flames are being tackled by the monsoon buckets, it would take at least two days more work by the ground crews to get the fire out, according to Still.

There is an air exclusion zone around the fire, so no private aircraft or drones can fly over the fire ground, to enable the helicopters to work in safety.

Wanaka crews were alerted to the fire around 3pm yesterday but soon needed back-up from other urban and rural Central Otago units as the flames swept up the mountain.

The fire was visible from Wanaka and at least 100 people drove up Wanaka-Mount Aspiring Rd to get a closer view.

Smoke engulfed the sky for the majority of the afternoon and evening as fire crews battled the blaze.

Initially, residents of nearby houses and holidaymakers at the Top 10 Holiday Park were told to be ready to evacuate.

Fire and Emergency New Zealand (Fenz) Central Otago assistant area manager Steve Jones said the first thing fire crews did was protect those properties so they were no longer in danger.

Eight helicopters were on the scene in support with monsoon buckets.

Jones said the fire had been contained by late afternoon, and all stock had been cleared from the hillside.

Still did not know how the blaze started, but with the area being so dry, coupled with the heat and humidity, the fire just took off.

''We've been fully focused on putting it out, but we will start investigating the cause [today].''

Wanaka has had less than 5mm of rain since December 9, and the temperatures over the last three days have all been over 28degC with high winds.

Jones also said the heat combined with the wind played a major role in the size of the fire.

A 33-year-old man has been charged with endangering a transport facility after a drone was flown in the area of the fire yesterday afternoon.

He is due to appear in the Queenstown District Court on Monday.