RESIDENTS stuck in a town in eastern Victoria under siege from a killer bushfire have vowed to continue to fight to save their homes.

Licola, 254km east of Melbourne, was boxed in by the blaze last week, with about 30 residents staying to defend their properties.

The inferno, which began in the Baw Baw National Park on Thursday and spread rapidly, has already claimed one life, 21 houses, 11 vehicles and 40 sheds.

But Licola resident Ralph Barraclough said that the town was well-prepared.

"Most of us are members of the CFA, we know what to do,'' he said. "No one's life is in danger, we're used to these sort of things.''

So fierce was the fire that at one stage the only access into Licola was by helicopter, after fallen trees blocked off the only two roads.

Mr Barraclough said the small township had stayed to battle the blaze that never arrived, despite dire warnings.

"We're pretty resilient, we've all got chainsaws because there is always the odd tree falling over,'' Mr Barraclough said.

"We were told that we would be burnt out. We weren't.''

The fire had torn through 56,000ha of land by last night as firefighters worked to build containment lines.

Country Fire Authority incident controller Ben Rankin said fire crews were working against the clock to prepare for a return to hot weather and strong winds on Thursday.

"We've done some good containment work at the north-western end of the fire. There is a large section of the fire that's requiring a significant amount of work,'' he said.

A larger team of bulldozers was brought in yesterday as more fire crews hit the ground.

"Thursday is the day we're working towards. All the work we're doing in the next few days is relating to Thursday,'' Mr Rankin said.

"It is going to be a much hotter day with stronger winds.''

Firefighters fear the strong winds could push the fire towards Maffra.

"There's definitely no end in sight yet,'' Mr Rankin said.

Milder conditions saw little movement in the fire yesterday as farmers continued the grim task of putting down badly injured livestock. Hundreds of animals have already been lost to the inferno.

The former boss of Victoria's forest firefighting force believes only a major dumping of rain will control the Gippsland inferno.

Athol Hodgson, retired chief fire officer for the Department of Conservation, Forests and Lands, said the blaze presented an unprecedented challenge to authorities.

Mr Hodgson said there were up to a million hectares of bush in Gippsland which had been burnt out by two major fires in the past decade.

This had killed vast expanses of gum trees which had shed large strips of bark, leaving a massive layer of volatile fuel on the forest floor.

"It's carrying a type of fuel we haven't had to deal with before,'' he said.

Mr Hodgson, also a former Country Fire Authority board member, said the situation was vastly different to grass fires in more open country.

He said there was a grave risk the fire front would move into more remote wilderness areas.

This would put firefighters at a major disadvantage because of the difficulty in using bulldozers to clear breaks.

Mr Hodgson said firefighters could work to control the front but, because of the country it is in, the danger would not fully abate until there was heavy rain.

"It'll take an inch-and-a-half (37mm) to put it out. This could go on for quite a while,'' he said.

Premier Ted Baillieu said Department of Human Services grants were now available for people who needed help with accommodation or resettlement.

"People who have been displaced and are seeking to re-establish themselves will have access to $30,000 grants,'' he said.

"Those who have lost homes are obviously in line for that.''

He said people could also apply for short-term personal emergency grants, which are worth up to $1200 a family.