The unidentified man was also charged with "intentionally or recklessly" lighting the fire near the town of Churchill in the southern state of Victoria last Saturday, said a police spokesman. Twenty-one people died in the fire.

Prime Minister Kevin Rudd has described Australia's deadliest bushfires as "mass murder".

The man, who was arrested on Friday, did not appear in court when the charges were laid. Police told the Morwell Magistrates Court the man was in a fragile mental state, said local media.

The court ordered a suppression order on the man's identity and ordered that he be assessed by a psychologist.

The man was transferred from rural Victoria to Australia's second largest city of Melbourne for his own safety, said local media, and will reappear in Melbourne Magistrates Court on Feb. 16.

In Victoria, arson carries a maximum penalty of 25 years, with the bushfire charge carrying a maximum penalty of 15 years.

Authorities say the bushfire toll is expected to rise beyond 200 as more bodies are discovered in the remains of houses.

One razed town, Marysville, sealed off to the public due to the horrific scenes there, may contain 50 to 100 more dead, authorities say. That would bring the toll to around 300.

Australia has launched its biggest arson investigation, "Operation Phoenix", believing at least one or more of the fires may have been deliberately lit.

Police detained two men on Thursday but later released them.

Thousands of firefighters on Friday continued to battle blazes in Victoria, with some 20 fires still burning, many out of control. Forty-four public schools across the state were closed on Friday due to the bushfire threat.

The disaster area, more than twice the size of London and encompassing more than 20 towns, has been declared a crime zone. The fires have burnt 1,831 homes and left 7,000 people homeless.