expected to top 200 and police fear it could go as high as 300. The official toll stands at 181.
Many people are still unaccounted for and there have been suggestions that officials may have been holding back on raising the official toll.
Emergency service workers have been scouring burnt out houses and cars to retrieve victims. However what they are finding in many cases are charred bones, rather than bodies.
"There are still a large number of people, in excess of 50 ... who the coroner believes are already deceased, but are not yet identified," Victorian Premier John Brumby told reporters.
"This is going to be a significant number, it will exceed 200 deaths."
The process of identifying all the victims may takes months. Some may never be identified.
Victoria state Police Commissioner Christine Nixon launched the nation`s biggest arson investigation, dubbed "Operation Phoenix", vowing to catch anyone who started a blaze.
The bushfires which swept through Victoria on Saturday night were "suspicious" because there were no natural events, such as lightning, which would have sparked the blazes, police say.
Australia is the most fire-prone country on earth, say scientists, and most of its bushfires are ignited by lightning.
Fire officials monitor lightning strikes and any fire that does not correspond with a strike is assumed to be started by people, either accidentally or deliberately.
Authorities say anyone found guilty could face manslaughter or murder charges.
"The laws of the state provide that they can be put away and put away for life," says Prime Minister Kevin Rudd.
"My own personal view is they should be allowed to rot in jail. This is unspeakable murder on a mass scale."
The disaster area, encompassing more than 20 towns north of Melbourne, has been declared a crime zone by officials. Police tape flutters around charred houses where bodies have been found.
Danger not over
About 25 fires are still burning in Victoria, with a dozen towns placed on alert as strong winds flared.
"The fires are nowhere near controlled for people to let their guard down," says emergency official Kevin Monk.
The head of the NSW Fire Brigade says millions of people living near bushland can no longer expect emergency workers to save them during a bushfire because of a lack of resources.
Climate change
The fires have increased pressure on the Australian Prime Minister to take firm action on climate change. Scientists blame global warming for conditions that fuelled the disaster.
"This week`s tragedy shows that we are now dealing with a changed climate in Australia and it is now apparent to all just how much we stand to lose," Greenpeace campaigner Trish Harrup said in a statement.
Major bushfires are not unusual, however.
"The fire weather experienced on Saturday ... although infrequent, is not unexpected, as on average this extreme fire weather occurs every 5 to 20 years," says Justin Leonard at the Commonwealth Scientific & Industrial Research Organisation.
Australia is particularly vulnerable to climate change because of its hot, dry environment, but is dependent on coal-fired power. Rudd has set a target to cut overall greenhouse gas emissions by only 5 by 2020.
Stay and defend policy reviewed
Victoria has ordered a Royal Commission of Inquiry to probe all aspects of the bushfires, including safety guidelines.
Officials say the golden rule of surviving forest fires is to evacuate early or stay and defend homes, but experts say that it appears many victims panicked and fled at the worst time. Some were incinerated in cars as they tried to outrun the flames.
"Our research has shown that fleeing at the last moment is the worst possible option. This is where most people have died or been injured," says John Handmer at the Bushfire Cooperative Research Centre.
The bushfire tragedy is the worst natural disaster in Australia in 110 years. The previous worst bushfire was the Ash Wednesday fires of 1983 which killed 75 people.
