"We are left speechless at the thought and the possibility that some of these fires may have been deliberately lit," Rudd told parliament.

"Something which the nation must now attend to as a matter of grave urgency is the problem of arson.

"This is simply murder on a grand scale. Let us attend to this unfinished business of the nation and come to grips with this evil thing."

Police announced Tuesday that a special taskforce of 100 officers had been formed to investigate the wildfires and track down the arsonists believed responsible for starting some of them.

Victoria state police commissioner Christine Nixon said police were confident they would catch the arsonists.

At least 173 people died in the fires at the weekend and the death toll is expected to rise further as emergency crews comb through the disaster area and its blackened homes.

Police are convinced that at least one of the major fires, in Gippsland, east of the state capital Melbourne, was deliberately lit. The latest figures show that around 20 people died in that inferno.

Police are reported to have been handed a video tape to help in their investigation of the fire, but Deputy Police Commissioner Kieran Walshe would not confirm this.

"We have got some very dedicated investigators working in a strong team to get all the evidence available to enable us to be in position to hopefully identify the perpetrator," Walshe told ABC television.

"We are feeling confident... that we are making progress."

The new Task Force Phoenix will investigate all fire-related deaths and police have warned that arsonists could be charged with murder.

"We will pursue these people and anyone who has any information, or thinks there may have been something strange about particular fires, please contact us," Nixon said.

The firefighters themselves did not believe the fires could have started naturally, she said.

"These people have lit these fires on the worst day that Victoria could have had," she said, referring to Saturday's record temperatures of more than 46 degrees Celsius (115 degrees Fahrenheit).

Fury over the suspected arson grew among Gippsland residents as they mourned the dead and their lost homes, with one suggesting any arsonists caught should be forced to help remove charred bodies.

"I reckon they should be going up there taking bodies out of cars," Daryl Paine, whose house in the small central Gippsland community of Callignee was destroyed, told the national AAP news agency.

At least 12 of the township's population of about 500 residents were killed by the fire.

Di Matthews, whose daughter lost her home, called for life prison terms for arsonists.

"There's got to be really harsh penalties. If they find them they should be severely punished, they've caused so much heartache to so many people, definitely life in jail," she said.

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