Prime Minister Kevin Rudd returned to Canberra yesterday and told Parliament the recovery would be a difficult and uneven task, but the nation stood by Victorians.

''And not just the nation, but good people across the world an expression of our common humanity,'' he said.

United States President Barack Obama and Pope Benedict XVI were among world leaders to send their condolences.

''President Obama said that we should know in Australia that the prayers of himself, his wife, Michelle, their family and of the American people are with the people of Victoria, people of Australia,'' Mr Rudd said.

Governor-General Quentin Bryce has urged Australians to ''continue to face the crisis with the magnificent skill our fire and rescue authorities have unfailingly demonstrated from the start''.

Victoria Police Chief Commissioner Christine Nixon warned the death toll would continue to rise at least until the weekend.

''I think we still have a distance to go,'' she said.

''It will take some time, there are a number of areas we haven't gotten to. I'm not sure how high the number will be.''

Ms Nixon will head the newly created Victorian Bushfire Reconstruction and Recovery Authority that will coordinate the statewide recovery effort.

Ms Nixon's new job will be daunting and involves coordinating all levels of government, community organisations, reporting to Mr Brumby and having funds from the bushfire appeal at her disposal to rebuild the state.

With more than 700 homes confirmed destroyed, the recovery effort will be larger than the years-long reconstruction of Canberra after the 2003 fires.

Mr Brumby said new homes would be built with fire defence in mind and could include underground bunkers.

Some will question whether rebuilding small towns such as Marysville is worthwhile, and some survivors have indicated they may seek new lives in safer Melbourne suburbs.

But most residents share the sentiments of Mr Rudd and Mr Brumby and have vowed to rebuild.

The immediate aid effort is increasing, with the Federal Government pledging extra funding and an increase to the 450-strong Defence Force presence.

Longer term, a royal commission will investigate and a police taskforce will dedicate a year to victim identification and investigation.

With fires still burning, the economic impact cannot yet be fully calculated but the bill is set to run into the billions.

Electricity supply, water catchments and telephone exchanges are still under threat from fires, so the scale of the infrastructure needed is still unclear. The dry conditions make work difficult, and the Department of Sustainability and Environment's fire chief, Ewan Waller, has warned dangerous conditions will return this weekend.

''There's absolutely no way we will be able to contain all fires before we go into the next hot spell, and that will be around the weekend and into next week,'' he said.

In Healesville, properties were under ember attack yesterday morning and residents watched in fear as surrounding mountains smouldered.

Only good luck and the whim of the weather saved the town from direct attack, although McEwen MP Fran Bailey and her staff evacuated from the Healesville office.

Fires further north in Yea and in the state's north-east near Beechworth were threatening, however yesterday proved the best day for firefighters since the weekend.

Kinglake residents who had been angry at being kept away from their homes were escorted into the town but found little of any comfort.

Police Assistant Commissioner Dannye Moloney, leading the victim identification and the criminal investigation, was the most explicit about the reasons for keeping residents away while his teams searched through the ashes.

''We've got two considerations here; some areas were no-go areas ... it is dangerous out there,'' he said.

''The second consideration is we don't really need our public driving past deceased persons on roads and so forth.

''I don't think we should put our public through that, especially people who have been through trauma.''

Mr Moloney said the Churchill fire was almost certainly deliberately lit and further evidence was emerging about suspicious activity at other fire sites.

Victorian Institute of Forensic Medicine director Stephen Cordner said plans were in place for a temporary morgue to receive 300 bodies, and the state could cope with more if necessary.

''Our planning has been on the basis of accommodating up to 300 people,'' Professor Cordner said.

''That's got nothing to do with what's being expected, that's simply for planning purposes. We hope of course it will be considerably less.''