At least 100 properties have been destroyed and thousands of people have been left stranded by bushfires that are continuing to rage out of control in Tasmania.
Towns on the devastated Tasman Peninsula in the state's south-east are cut off and only accessible via sea.
Meanwhile, a fire emergency warning has been issued between Inala Road at Forcett and the Tasman Peninsula.
The Tasmania Fire Service (TFS) says the out-of-control blaze has spread south of Murdunna and has active fire edges back to Forcett and Dodges Ferry.
The service says Taranna is currently being affected by the fire and it is too late for residents to leave the town.
It is understood a number of properties near Eaglehawk Neck have been lost.
The peninsula remains cut off with the Arthur Highway closed until further notice.
Phil Douglas from the TFS says people need to keep off the highway near the Forcett and Nubeena areas.
"There is a strong potential for trees and power lines to fall across those roads at any time without any warming," he said.
An emergency warning has also been issued for the Bicheno area in the state's east, where a 4,000-hectare fire is burning out of control.
Firefighters warned the communities of Friendly Beaches and Bicheno may be affected by smoke, embers and ash.
They said Coles Bay Road, south of the Apsley River, and the Tasman Highway, south of Tower Hill, were at very high fire risk.
Coles Bay Road has been closed in both directions, cutting road access to Coles Bay on the Freycinet Peninsula.
The TFS says it is likely too late for residents to leave the affected area, with residents urged to activate their bushfire plans and defend their homes or leave, but only if the path is clear.
There is a community fire refuge for Bicheno residents at Bicheno Community Hall and another for Coles Bay and Swanwick residents at the Swansea Football Ground.
Map: Tasmanian bushfires map
TFS deputy chief officer Gavin Freeman says a change is expected later in the day.
"The breeze is still up, not quite as bad as it was for us yesterday, of course, but we are expecting still to be chasing uncontained fire, fire crews reacting to that and making sure we have people out of the way of fires if they do jump containment lines," he said.
"It is very much getting a handle on what we have got and making the most of slightly eased conditions."
He is urging people in affected areas to remain vigilant.
"The thing we are most concerned about now, after the terrible conditions we had yesterday, that people might breathe the sigh of relief and relax," he said.
"We can't relax yet. People need to remain vigilant, ready to enact the bushfire plan, and listen to media and the warnings through our website as to instructions of what they need to do."
Overnight a massive sea rescue operation moved more than 1,000 people trapped by the Tasman Peninsula fires to safety in Hobart, 50 kilometres away.
Thousands of people, including 700 tourists at Port Arthur, remain stranded.
Acting State Premier Bryan Green says every effort is being made to ensure safe centres are available at Nubeena and Sorell and back in Hobart.
"At one stage there were about 3,000 people isolated on the Peninsula but it is my understanding the resources we have available will ensure we can move those people from the affected area by at least the early hours of the morning," he said.
"In the meantime, we will continue to ensure that we put in place all of the appropriate planning to provide the services that are required immediately for people, and at the same time, start to think about how we recover from this situation."
Dunalley residents have told how they were forced to dive into the canal in the middle of the town to escape the wall of flames coming towards them.
There are still dozens more fires burning burning out of control across Tasmania, forcing evacuations and cutting off towns.
Authorities have increased the danger warning of a fire burning out of control at Nubeena, near a fire refuge centre on the Tasman Peninsula.
A fire at Lake Repulse in the Upper Derwent Valley has destroyed several homes as well as livestock and farming equipment in the area and there is a watch and act alert for the area.
The TFS says the fire is affecting communities at Ellendale and Karanja, while Lawrenny and Hamilton may be directly affected later on Saturday.
Residents have been told to move to a nearby safer place as the last resort, but only if the path is clear.
A fire at Speedwell Road at Montumana, in the state's north-west, is still burning out of control, but the alert level has been downgraded.
Crews are continuing to monitor blazes at Tunnack, Black Bobs, Buckland, Steppes, Southwest and Richmond.
Police have taken control of the fire-ravaged area in Tasmania's south, declaring it a serious incident site.
The main street of Dunalley was gutted by fire on Friday night, with nearly 65 homes destroyed as well as the local school.
Fifteen homes have gone at Boomer Bay, 20 at Murdunna and about 40 per cent of the properties at Conelley's Marsh have been damaged or destroyed.
The move means police can restrict public access to the the area and people must obey officers' instructions at the site.
Police say there have been no confirmed reports of death or injuries at Dunalley at this stage.
However, a team is investigating reports a fire crew was unable to reach a man who was defending his home when the fire passed over.
"It remains just a report in isolation," fire chief Michael Brown said.
"I know that police are looking very hard at those sorts of damage assessments to see if there are losses and that is not confirmed and nor are we getting any information about anyone in particular missing, for example. So at the moment that remains positive."
The trees just went off. They were like firecrackers - 20, 30 feet high, the flames.
I'm looking out the window now ... and the flames across the road at the house - there's a big boat in there and that's just on fire.
The gas cylinders are screaming, and the temperature outside would be 70 degrees - it'd burn your face, it's that hot, if you step outside the building.
Dunalley resident Tony Young on the loss of his home
Listen to the interview
Earlier, Acting Police Commissioner Scott Tilyard said a crew at Dunalley was trapped when the bushfire passed.
"They had to take shelter in their vehicle as the fire burned over their vehicle and they were, from that location as I understand it, able to see a gentlemen who was trying to protect his property and they couldn't get to him, it was too unsafe," he said.
Dunalley resident Tony Young says he realised the town was in danger when he noticed clouds of smoke and a helicopter.
"I'd no sooner said that than the embers came straight into the garage where I was standing and ignited the ceiling in the shed and just engulfed it," he said.
"So all I could do was drive the car out of the shed, drive across the other side of the road and stand back and look at the whole place just being engulfed in flames, just like a movie."
ABC reporter Edith Bevin is one of the first reporters to arrive in the town.
She says residents who remained in the town are in shock, with some houses surviving but neighbouring ones burned to the ground.
We've just arrived in Dunalley by boat. The fire engulfed this township overnight. And the road out is cut. Seventy homes have been destroyed.
Police are still trying to account for all the locals. A number of people evacuated before the fire. Others got out by boat during and after.
We were met at the docks a man asking if we were headed back to Hobart and if there was space for him. He stayed to try and save his farm but lost his home right in the centre of the town.
Around me I can see home that have been burnt to the ground and others smouldering but the house next door survived. Power lines are down.
We've seen a few people here are driving through the town or walking the streets - in tears, or looking shocked.
ABC reporter Edith Bevin
Mr Green took a flight over the Tasman Peninsula and says he saw many houses that had been destroyed around Dunalley.
"It was very difficult to see, because of the smoke, what's happening in other centres, although we did witness some houses burning close to Eaglehawk Neck as we flew over," he said.
"This is obviously clearly a devastating fire in itself and of course there are other fires burning around the state that we are working on."
He thanked emergency crews and those who had operated ferries and boats to evacuate those stranded on the Tasman Peninsula.
"The flight today confirmed once again that yesterday, the catastrophic nature of the weather meant that many houses burnt well and truly before the front," he said.
"There was really nothing people could do with respect to managing that other than to protect people and usher them to safe places.
"Given that it's been reported to me that yesterday's events were worse by degree than the '67 bushfires, that the way our emergency services have managed this situation has been outstanding," he said.
Take a look back at how events unfolded on Friday evening.
The sky was just scarlet... It burnt right to the waterline. It was just unbelievable.
David from Primrose Sands
David from Primrose Sands, near Dunalley, took refuge on a boat offshore and told ABC Hobart it had been an "unbelievable" experience.
"The wind has turned to the south-west which is absolutely fantastic for us down here. It got pretty bad here about 45 mins ago," he said.
"We had the winds were blowing from the north-west and they came down over the hill into Susan's Bay right down to the beach and there was just devastation.
"The sky was just scarlet... It burnt right to the waterline. It was just unbelievable.
"I unfortunately had to take a gentleman down to Dunalley. I just could not believe it, it was so dark. I felt for the people in Dunalley."
Prime Minister Julia Gillard has told Channel 9 the Federal Government is working with Tasmanian officials to support the communities affected by the fires.
"At the moment the focus of course is on still fighting the fires," she said.
"We'll keep working with the State Government and local authorities to support communities through."
Extremely hot, dry and windy conditions on Friday put southern states on the most extreme fire alert for several years.
Temperatures in Hobart hit 41.3 degrees Celsius - the highest temperature in 120 years of record keeping.
Fire authorities are also battling blazes across South Australia, Victoria, New South Wales and Queensland.
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