Police remained on standby last night, ready to evacuate Waipori Falls residents as helicopters and ground crews battled an 80ha blaze in the area.
Fire and Emergency New Zealand shift manager Andrew Norris said a large area of mainly tussock and scrub caught fire near Waipori Falls Rd about 1.20pm.
The blaze was attended by eight helicopters with monsoon buckets and fire crews from Waihola, Outram and Dunedin, including a command unit from Dunedin.
The fire proved difficult to fight because the area was not easily accessed.
Norris said about 75 per cent of the fire's perimeter had been contained but a large area was still burning out of control.