UPDATE: A GRASSFIRE in the Victorian town of Wallan was probably deliberately lit, the Country Fire Authority (CFA) says.
The 5ha blaze broke out at Taylors Lane at Wallan, about 60km north of Melbourne and home to more than 12,000 people, this afternoon and took firefighters two and a half hours to control.
CFA operations officer David Harris said it was believed the fire was suspicious.
"It was probably deliberately lit and police are investigating that," he told AAP.
Nearby, there were two other small grassfires at High Camp and Glenaroua, about 40km to the north of Wallan.
Karen Buckley who works at the local pub, Hogans Hotel, said people had gathered there to wait.
"I can see the smoke from the window here," she told AAP.
"We have a couple of local residents actually here with their little dogs, just waiting it out.
"Everyone is just sitting back and just watching."
Ms Buckley said her property is in an estate off Taylors Lane, where her 19-year-old daughter was looking after the family's show dogs and cats.
"She is just worried more about our animals," Ms Buckley said.
Twenty fire trucks and two helicopters were sent to tackle the blaze, which is still burning but under control.