A cigarette butt or car accident are two possible causes for the fire that burnt through 75 hectares of forestry at Hanmer Springs today.
The fire is largely contained and fire crews will be monitoring it tonight with four helicopters on standby.
Residents have been advised they can return to their properties tonight.
They are still narrowing down the cause of the fire but believe it started in the river bed. Fire investigators are still looking at evidence.
Department of Conservation liaison officer for Hanmer fire Kingsley Timpson says there are two possible causes after reports of a car crash in the area last night which may have sparked a flame or a stray cigarette butt from a freedom camper.
The bridge to Hanmer Springs is now open after blocking access in and out of the township.
Seven helicopters continued to dampen down hot spots but by mid-morning the fire was under control.
The fire had spread from the river bed up two valleys and it was crucial it didn't spread onto the other side of the ridge where it could easily have flared up again.
Firefighters worked to clear debris and ashes from the road.
It will take awhile to completely put out the fire and the cleanup isn't going to be easy, chief fire officer John Donaldson says.
The town lost power last night when the fire began but a visitor in Hanmer Springs told Newshub it came back on around 10am this morning. He only saw smoke from where he was located at a hotel in the township.
The Hanmer Springs Thermal Pools and Spa closed this morning, general manager Graeme Abbot says.
Electricity was needed to pump the thermal water out from the ground and keep it hot.
"It's delayed our opening of the pools here by three hours...with no electricity we can't get the water going round and round the pools, we can't get it through filtration," he says.
He says it was the longest time the power had been out in the area during the daytime but commended the efforts of the firefighters.
"I understand it got pretty close to the bridge catching on fire and that would've had a pretty big impact for this town, so they did an amazing job."
The pool was scheduled to open in the afternoon.
Cars backed up on the Hanmer side (Emma Cropper)
Firefighters in Hanmer (Lloyd Rankin)
No homes are under threat despite around 20 families being evacuated when the fire began. They had to wait for clearance from the helicopter pilots who didn't want anyone underneath them while they were filling and carrying monsoon buckets.
The fire has burnt through around 70 to 80 hectares in the Waiau River bed.
A Melbourne couple has been waiting for the bridge to open since 9am but weren't worried about the wait, keeping occupied with books. They needed to be back at the airport by this evening.
"From the sound of it [the fire was] very nasty. We were staying at a motel up the road, evidently people were evacuated and the motel actually put those people up and that was about 2am this morning."
A sign up in the township (Lloyd Rankin)
Area commander Dave Berry says helicopters were needed to reach the flames which had climbed up a cliff face and were not accessible by firefighters on land.
"There's fire down by the river and fire up the hill and a lot of smoke and [it's] all around the pylons, wind gusts of up to 50km/h at this stage, so we're monitoring weather conditions also."
The fire from the bridge that's been closed, cutting access in and out (Suzette Howe)
Mr Donaldson was stuck on Waiau Bridge earlier this morning and said "the whole hillside is just glowing with embers and flames... to look over the other side of the hill is just a massive glow where it's into the tree plantation".
The fire broke out around 11:30pm yesterday but it is still not known what caused it.
"When we first arrived it was just a small fire then unfortunately the wind got under behind it and it was just taken out of our hands."
Locals are shaken by the fire but are resilient, he says.
"The people of Hanmer have been quite frightened and alarmed by what they've most probably seen from the glow on the sky. But being a resilient and a strong little town it won't affect too many people it will affect those that don't know the systems that are in place to put things out."
More than 50 firefighters battled the blaze. Crews were relieved by Department of Conservation manpower.
Newshub.
