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Fire crews from Lake Hawea, Wanaka and Luggate were called to what was initially reported as a cabin fire, but was now thought to be a house truck fire, off Domain Rd, about 11.20am today.
In a statement this evening, police said crews have put the blaze out and located possible human remains within the dwelling. However, that had yet to be confirmed by the pathologist.
Police and a specialist fire investigator would carry out a scene examination tomorrow morning.
Fire and Emergency New Zealand acting shift manager Ian Littlejohn said when fire crews arrived they found the dwelling engulfed in flames and it was now a total loss.
The person who lived there was understood to be an elderly man, considered a "local identity", who was regularly seen cycling between Lake Hawea and Wanaka.
Police want to hear from anyone who may have information about the fire. Contact Wanaka Police on (03) 443-7272.