THE Victorian Government has been told it should pay people to abandon areas most at risk from deadly bushfires.

Bushfires Royal Commission legal counsel Melinda Richards last week called for a "retreat and resettlement strategy" in areas of "unacceptably high" risk.

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Speaking on the commission's 128th day of hearings last Thursday, Ms Richards said the strategy should include the "non-compulsory acquisition" of land "to encourage people living in areas of extreme bushfire risk to move to safer areas".

"Priority should be given to the acquisition of land in areas of unacceptably high bushfire risk on which dwellings were damaged or destroyed by the 2009 bushfires," she said.

Ms Richards also criticised the Government for committing to rebuild communities "without any ... consideration of how that might be done without simply putting people back in the path of the same danger".

She said more stringent building standards were "the only concrete measure that has been taken by government to ensure that those who rebuild do so in a safer way".

"To date there's been no ... consideration of whether settlements like Pine Ridge Road in Kinglake West can be rebuilt with an acceptable level of bushfire risk and, if so, how," she said.

However, counsel for the Government, Kerri Judd, SC, said a resettlement scheme would be too complex and expensive and could actually increase bushfire risk.

Ms Judd told the Commission that under a voluntary scheme, "the owners most at risk may not take up the option".

"Our position is not to fragment these communities by means of a piecemeal acquisition ... but rather to work with these communities to strengthen existing measures that protect them from bushfire."

Commissioner Ron McLeod said most of Ms Judd's arguments against a resettlement scheme would be "eliminated by a system that involves compulsory acquisition".

But Ms Judd said that "would not overcome the issues of the extreme expense (nor) the complexity to deliver".

She also said the Government agreed that future development should "only proceed where bushfire risk can be reduced to an acceptable level".

Neil Young, QC, for the Municipal Association of Victoria, also told the Commission there was an "irreconcilable tension" between controls on removing native bush and "the primacy that should be given to bushfire protection".