Wenita Forests are not discounting the idea the fire on 95 hectares of forestry land on Mt Allan could have been deliberately lit.
Chief executive Dave Cormack said there had been no activity at the site since last Saturday when logging was shut down for the Christmas holiday season.
He said the fire was believed to have started in an area of cut-over where trees had been felled.
He had no idea what started the blaze at this stage, but he was not discounting the scenario the fire may have been deliberately lit.
"It's one possibility, but there could be others. It's a pretty scary thought.''
An investigation would be carried out to determine the cause of the fire.
The fire was reported to emergency services about 8.30pm on Thursday and fire appliances from Mosgiel, Outram, Rural Fire and Dunedin International Airport were sent to fight the blaze, which initially affected about 2ha of land.
However, strong winds early on Frinday morning fanned the flames and the fire spread to forestry about 1.5km away, he said.
A series of fires were now dotted over a 95ha area - 5ha of which were covered in standing forestry.
Mr Cormack said firefighters and helicopters with monsoon buckets worked hard yesterday to contain the blaze and it now seemed to be under control.
However, firefighters and helicopter pilots would continue to work through Christmas to control a blaze.
"If the winds stay down and temperatures stay cool, we certainly hope we can contain it today. But it's still early days,'' he said.
Rumours were rife on the Taieri that the fire was deliberately lit.
A farmer on property neighbouring the fire-affected area on Mt Allan, said "who done it'' was the talk on the Taieri.
For the second time this year, he was having to keep a close eye on the flames to make sure they did not cross the bound ary and affect his land and stock.
"The wind's been dry and conditions are not too far of being tinder dry.''
He believed a more frightening situation would be if the wind turned northerly, because the fire would spread into standing trees and give it plenty of fuel to burn.
"Fingers crossed it doesn't happen,'' he said.
