Sydney bushfire downgraded to 'Advice' level

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The fire - which has burned 1000 hectares - resulted in hundreds of people leaving their homes on Saturday evening with flames nearly reaching properties at Holsworthy and Wattle Grove and spot fires later threatening Sutherland and Menai.

"Residents in Illawong, Bangor and Picnic Point are experiencing ember attack and should continue to monitor for any new spot fires in the affected areas".

RFS spokesman Greg Allan said powerful wind gusts on Sunday created challenging conditions for firefighters, but the forecast for today was a definite improvement.

Local MP Craig Kelly said because most of the communities in the area were quite bushy and remote, residents understood the risk of bushfires. "Large numbers of firefighters will continue to work into the night to bring the fire under control".

"We had some very big fires here in 1994, we lost something like 20 homes", he said.

An unspecified number of Menai and Barden Ridge residents left their homes after New South Wales authorities declared a state of emergency as nearly 100 firefighting trucks and 15 aircraft continued fighting back the blaze, Efe news agency reported.

"Most of those houses that burnt down were not from the fire front, it was from a spot fire or from a burning ember catching on fire on somebody's roof."

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Lighter winds saw the alert level for residents downgraded from an emergency warning to a "watch and act".

Firefighters fight flames close to homes in Corryton Court, Wattle Grove in Sydney.

"This huge blaze has been fought in very high temperatures, very high winds, unseasonal conditions, and has been done so in a way which has seen, to date, no injuries and no serious damage to property", Mr Turnbull said.

The temperature may remain a cause for concern, according to the RFS Deputy Commissioner Rob Rogers.

"We're certainly looking to maximise the amount of time we have them here".

Police believe the fire may have been lit on objective and are appealing for witnesses to contact them.