The man was burnt on 60 per cent of his body after a serious blaze in a block of six townhouses on Thurralilly Street on Friday night.

Neighbours have described how they heard a loud bang and screams. One neighbour, who did not want to be named, said he saw the man with burnt clothing.

The blaze destroyed one townhouse and damaged two. On Sunday all that remained of the worst-damaged townhouse was blackened rubble.

Firefighters were forced to knock down the walls of the hardest-hit house, which was left structurally unsound.

The roof of one of the adjoining properties also appeared badly damaged.

It appeared residents from the two adjoining properties had not been allowed to return to their homes by Sunday afternoon. The houses remained fenced off with a security guard monitoring the property.

Windows of two townhouses facing the damaged townhouse were smashed and a door handle on a garage door on one was melted.

Neighbours said the intense blaze quickly took hold of the property.

One neighbour said he had only just met the man that evening.

He said he heard screams and saw the man's car and garage ablaze.

"I saw the bloke standing there with all his clothes burnt off and stuff," he said.

Describing the screams he heard, the man said: "It sounded like little kids playing or something to start with.

"Then we heard someone calling 'Call the ambulance'."

The man said an officer at the scene had told him it was one of the worst house fires firefighters had seen.

Police said on Sunday a report would be prepared for the coroner because the damage from the blaze was estimated at more than $500,000.

The injured man was initially taken to Canberra Hospital but it is understood he has been transferred to a hospital in Sydney for treatment.

A Fire and Rescue NSW commander said on Friday he believed the fire had been caused by an accident involving petrol and a naked flame.