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An Australian firefighter on New Year's Eve. (AFP/SAEED KHAN)

"It is with great sadness that we confirm that a ... firefighter from Parks Victoria has been involved in an incident while working on a fire in the Omeo area resulting in a fatality," Forest Fire Management Victoria Chief Fire Officer Chris Hardman said in a statement.

Since October, thousands of Australians have been subjected to repeat evacuations as huge and unpredictable fires scorched more than 10.3 million hectares (25.5 million acres), an area roughly the size of South Korea. The Australian bush havburning for nearly three months nowkilling 28 people, claiming 2,000 homes.

Prime Minister Scott Morrison, who has been heavily criticised by the opposition and environmental groups for his handling of the bushfires and his stance on climate change, was set to address the crisis on Sunday morning on ABC News television.

Morrison said he would propose a powerful judicial inquiry, known as the Royal Commission, into the handling of the fires.

"There is obviously a need for a national review of the response," Morrison said in an interview with ABC television.

Asked whether it should be a Royal Commission, Morrison said: "I think that is what would be necessary and I will be taking a proposal through the Cabinet to that end, but it must be done with consultations with the states and territories."

Cooler weather conditions have brought a temporary respite for many of Australia's burning areas over the weekend, but a firefighter died on duty in Victoria, where new flames sparked and authorities said lives and homes are still under threat. Authorities said the risk was far from over and more hot weather is expected.

Meanwhile, his office released a statement saying that more mental health services will be provided for those affected by the fires.

"We need to ensure the trauma and mental health needs of our people are supported in a way like we never have before," Morrison was cited as saying.

Although Morrison rejected criticism that his government had not done enough before the bushfire season started, he admitted that once the fires started, some responses could have been different.

"There are things I could have handled on the ground much better," he said. "These are sensitive environments, there are very emotional environments; prime ministers are flesh and blood too in how they engage with people."