Victorian towns evacuated as inferno rages but fears of cyclone hitting Northern Territory have eased.

More than 100 homes were destroyed by a Christmas Day wildfire that tore through a stretch of coastline popular with tourists in southern Australia.

Fire officials in Victoria state said cooler weather yesterday eased the immediate threat from a blaze along the scenic Great Ocean Rd. But officials warn the fire could continue burning for weeks.

Victoria Emergency Management Commissioner Craig Lapsley said no one was injured by the blaze that destroyed 116 houses in the small towns of Wye River and Separation Creek.

Hundreds of firefighters spent Christmas battling the blaze. The fire was triggered by a lightning strike and forced thousands from their homes.

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The Insurance Council of Australia yesterday declared the bushfires a catastrophe, estimating initial insurance losses of A$25 million.

The state and federal governments have offered emergency relief of up to A$1300 per household to help pay for emergency food, shelter, clothing and personal items.

The two tiers of government say households will also be able to apply for up to $32,500 to help fund clean-up efforts, repairs, replacing damaged contents and rebuilding destroyed homes.

Victorian Emergency Services Minister Jane Garrett said the relief grants would help locals get back on their feet as fast as possible.

"It has been devastating for these communities at Christmas time, which is why we are making sure people have the support they need," she said.

Ms Garrett said firefighters were working tirelessly to control the blazes, but warned that locals weren't in the clear yet, with the fires expected to continue burning for several weeks.