A grass fire emitted a bright orange glow and smoke in Fairy Meadow on Tuesday night.
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The blaze started on Clifford Street just after 10pm.
Fourteen Fire and Rescue NSW firefighters attended the scene and extinguished the blaze in less than 15 minutes.
A NSW Fire and Rescue spokesman said the blaze was about 50 metres by 50 metres large.
One resident, Natalie Marie said, on the Illawarra Region Neighbourhood Watch Facebook page, “embers flying everywhere from the wind...just drove past on highway, flames [are] huge.”
Brad Mcewen said it looked “huge for a grass fire” and “I was down near north Dalton Park and you could see it from there”.
Investigations into the cause are continuing.
A statewide fire ban was issued for Tuesday with temperatures tipped to reach the low-40s in some areas accompanied by high winds.
Strong winds, warm low-level temperatures and dry conditions combined with dry fuel from heatwave conditions in recent months led to elevated fire danger on Tuesday, a Bureau of Meteorology spokesman said.
Firefighters battled about 40 bush and grass fires across the state.
