Survivors have reportedly launched a lawsuit alleging that a downed power line sparked a fire that killed more than 100 people and destroyed about 1000 homes in the Kinglake area of Victoria state earlier this month.

The claim against SP Ausnet, part of the Singapore Power Group, is expected to run to hundreds of millions of dollars, the national AAP news agency said.

The company said only that it had been notified that a writ was filed on Monday alleging that "faulty and/or defective power lines" caused loss and damage.

"SP AusNet believes the claim is both premature and inappropriate," the company said in a statement to the Australian stock exchange.

"However, SP AusNet will vigorously defend the claim," it said. "If the claim is pursued, SP AusNet advises that it has liability insurance which provides cover for bushfire liability."

At least 189 people died in a swarm of wildfires which swept through Victoria as a heatwave produced tinder-box conditions over the weekend of February 7-8.

Some of the fires are believed to have started naturally or accidentally, while arson is suspected in others.

Victorian member of parliament Fran Bailey said Sunday the Country Fire Authority had told her a power line had broken before the Kinglake fire, AAP reported.

"It was whipping against the ground and sparked," she said.

Victoria police Chief Commissioner Christine Nixon said Sunday authorities were still determining how the Kinglake fire started.

"At this stage we are not able to confirm how it started. I understand there is some legal action that people are taking, but at this stage we're still investigating its cause," she told Channel Nine television.

The commission of inquiry into the fires will provide an interim report by August 17.

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