The New South Wales Rural Fire Service (RFS) says at least 33 homes have been lost in a bushfire west of Coonabarabran, which also damaged the Siding Spring Observatory.
The fire in the Warrumbungle National Park in the north-west of the state has burnt out nearly 40,000 hectares and has a 100-kilometre-wide front.
About 100 people living in the area have been forced to evacuate their homes as officials warn the amount of properties lost could rise.
A watch-and-act alert has been issued for the fire which is burning in a northerly direction about one kilometre south of Bugaldie.
Inspector Brett Lachlan from the RFS says properties to the west of the Warrumbungle National Park may come under threat if firefighters cannot contain the fire.
"We have a large number of fire trucks obviously at Bulgaldie, prepared for whatever might eventuate," he said.
"Finalise property preparations and things like that, it is still a very dynamic fire, the situation's going to continue to evolve."
Most residents have been evacuated to Baradine and Coonabarabran.
The RFS has confirmed 33 properties and more than 50 sheds have been destroyed, as well as machinery and there have been extensive stock losses.
The NSW Government has launched a website with information for affected communities.
RFS Deputy Commissioner Rob Rogers says the fire burned on Sunday with a ferocity not seen for many years in New South Wales.
"The smoke plume of that fire extended some 14km into the air and even prevented us from getting aircraft overhead because of just how dangerous and bumpy the conditions were," he said.
"Embers were being blown ahead of the fire and starting a new fire some 5km ahead and it became very apparent early in the piece that there was just absolutely no stopping that fire and it was simply too unsafe to leave people."
Mr Rogers says those who were removed from the area should not try to return until authorities deem it safe.
"At this point in time, we ask for their patience," he said.
"We know people are hurting, we know people have lost homes and we know homes are more than bricks and mortar, we know that it's their possessions and memories, we know it's very important... but not as important as their life."
Mr Rogers says crews are throwing every resource at the fire but he cannot guarantee it will be contained before warm weather returns later in the week.
Meanwhile, a watch and act alert has been issued for another fire, north-east of Coonabarabran, which has closed the Newell Highway.
The RFS says the two-hectare blaze is burning out of control but is not threatening properties at this stage.
And a fire near Eugowra, east of Forbes, which jumped containment lines this afternoon, has been brought back under control.
There were concerns it would reach the nearby Nangar National Park but crews are working to strengthen containment lines.
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Eighteen staff from the Siding Spring Observatory had to be led to safety at the height of the blaze last night.
The observatory, run by the Australian National University (ANU), is the country's largest optical astronomy research facility and was deliberately located in the Warrumbungle Ranges for the altitude, clear air, and low humidity.
ANU acting vice-chancellor Erik Lithander says five buildings, including cottages that house staff, have been destroyed, but fortunately the facility's 15 telescopes remain intact.
"First and foremost, the major relief is that all the staff were brought safely down from the mountain," he said.
"The fact that the telescopes seem to be undamaged is significant because this is the largest observatory site in Australia - it's the home to the largest optical telescope in Australia."
The university says it has about $80 million worth of assets on the site and they are fully covered by insurance.
Dr Lithander says there will be closer inspection of the site when it is deemed safe.
"We do not yet know that impact the extreme heat and the ash has had on the telescopes themselves, and we won't be able carry out that assessment until we can enter the buildings and inspect the inside of them," he said.
ANU staff are travelling from Canberra to take stock of the fire's impact.
The astronomer in charge of the observatory, Professor Fred Watson, has been monitoring the situation from Norway.
He said lessons were learnt from the fires which destroyed the Mount Stromlo observatory in Canberra in 2003.
"For example there was a program of undergrowth clearing. There was a program of fitting ember screens to all the windows and all the buildings on the observatory, which means that you can't get embers penetrating into the buildings and setting fire from the inside, which is what happened at Stromlo," he said.
Rural Fire Service Superintendent Allyn Purkiss says extra crews are being brought in from across the state today to help fight the Warrumbungle fire.
"We'll work into the day to keep properties protected around Bugaldie," he said.
"The fire as I said was running under some very strong winds up to about two o'clock this morning when the winds dropped and the fire conditions slowed right down.
"Rural properties between Baradine and Coonabarabran and between Coonabarabran and out towards Siding Springs, certainly those people were evacuated."
Two evacuation centres were set up at the Tattersalls Hotel in Baradine and the Coonabarabran Bowling Club.
'Fire storm in the sky'
Donna Burton owns one of the properties that was evacuated and does not know whether her home has been destroyed.
She says as she was leaving, the flames were already on her property.
"Just the way the wind changed, it just became the most frightening thing I think I've seen... or I want to see," she said.
"You could see a fire ball. It was like - you saw the darkness, you saw the smoke, you smelt it - it was almost like a mushroom cloud, but you could hear the crackling and the flames.
"It was literally a fire storm in the sky."
Large parts of NSW have been affected by bushfires this past week, brought on by searing temperatures and wild winds.
More than 170 fires continue to burn across the state and at least 30 of them are uncontained.
Firefighters in the state's north-west worked through the night to strengthen containment lines around a grass fire that had been threatening homes at Bundabarina, west of Collarenebri.
That fire has now been downgraded to advice status.
Superintendent John Cook says the cooler overnight conditions helped crews get the upper hand.
"We have no properties that have been lost and we have no properties that are under threat," he said.
"There was a stage where we were concerned about the township of Collarenebri, but with the hard work that the volunteers did we were able to allay the fear of the threat [to] Collarenebri."
Firefighters are also working to control blazes in and , while the .
In Tasmania, a Victorian firefighter has died while fighting a bushfire on the Tasman Peninsula, south of Hobart.
The man aged in his 60s was found dead yesterday about three kilometres from a fire edge east of Taranna.
He was one of the Victorian firefighters sent to Hobart to assist in controlling the bushfires that have destroyed about 170 properties.
A report is being prepared for the coroner.
The Tasmanian Fire Service and the Premier have expressed their condolences.
"It's the worst news we can get, one piece of news we certainly don't want to get," chief fire officer Mike Brown said.
Fires continue to burn across the state, which has already lost about 170 properties.
Mr Brown has urged vigilance, particularly near the peninsula area.
"With worse weather forecast for later in the week, we hold concerns still for that area."