In seaside communities along a 200-kilometre (135-mile) strip of coast, terrified crowds -- wrapped in blankets and wearing make-shift facemasks -- sought refuge from the inferno near the water.

Some with boats earlier took to the sea in near-darkness, hoping to find safety, as one of the worst days yet in Australia's months-long bushfire crisis prompted a military deployment to help relief efforts.

Three people have died, five more are unaccounted for, and scores of properties were feared destroyed after a brutal 24 hours in which flames reached well-populated towns like Batemans Bay, normally bursting with visitors during Australia's summer holidays.

"We've got literally hundreds, thousands of people up and down the coast, taking refuge on the beaches" and in surf clubs, said Shane Fitzsimmons, commissioner of the New South Wales Rural Fire Service.

"In the majority of these cases, we're being told that people will be sleeping over at these clubs," Surf Life Saving Australia's Steven Pearce told ABC.

"We'll have instances of 500 people or more trying to sleep in and around our surf clubs."

Around 4,000 people were trapped on the foreshore in the town of Mallacoota, where towering columns of smoke turned the sky pitch black and nearby fires caused waves of "ember attacks".

Authorities said later on Tuesday that Mallacoota and a nearby town remained cut off, but the life-threatening fire front had finally passed.

"I understand there was a public cheer down at the jetty when that was announced," said Steve Warrington of the Country Fire Authority.

In some places Tuesday's blazes were so intense, the smoke so thick and the dry lightning storms precipitated by the fires so severe that aerial reconnaissance and waterbombing had to be halted.

The situation was scarcely better in inland rural communities, where countless more people were displaced and forced into make-shift camps.

Hundreds of "anxious and stressed and traumatised" people were gathered at Bega's showgrounds, said 44-year-old Beck Walker, who had been holidaying with her husband and two young sons when they heard sirens warning them to evacuate before dawn.

"We had to pack up and leave straight away," she told AFP. "It was pretty scary because the sky was red... By 7:30 am we thought it was still night because the sky had turned black."

Australia's defence minister Linda Reynolds said helicopters, aircraft and naval ships would be sent to the region.

The military is expected to conduct damage assessments and potentially provide those displaced with food, shelter and electricity and even evacuation.

More back-up has been requested from firefighters in Canada and the United States.

- Unprecedented -

Australia's unprecedented bushfires have been burning for months, but the latest in a series of heatwaves and high winds have wrought new devastation.

The crisis has also hit cities like Sydney and Melbourne, home to several million people.

On Monday, around 100,000 people were urged to flee five Melbourne suburbs as the blaze bore down on homes just 16 kilometres (10 miles) from the centre of Australia's second-biggest city.

Sydney was again shrouded in toxic bushfire haze on Tuesday. City officials said Sydney's New Year's Eve fireworks would go ahead, but a similar event has been cancelled in Canberra and several regional towns.

A Rural Fire Service spokesman said a 28-year-old volunteer firefighter -- whose wife was due to give birth in May -- died Monday in New South Wales when a "fire tornado" picked up an eight-tonne truck "and flipped it over".

A 63-year-old man and his 29-year-old son died in the devastated town of Cobargo in the latest spasm of destruction Tuesday.

Ten others, including two volunteer firefighters, have been killed so far this fire season.

- Political backlash -

The blazes have destroyed more than 1,000 homes and scorched about 5.5 million hectares (13.5 million acres) -- an area bigger than Denmark or the Netherlands.

The crisis has focused attention on climate change -- which scientists say is creating a longer and more intense bushfire season -- and sparked street protests.

While conservative Prime Minister Scott Morrison belatedly acknowledged a link between the fires and climate change, he has continued his staunch support of Australia's lucrative coal mining industry and ruled out further action to cut carbon emissions.

Jenifer James, 64, said she had spent hours Tuesday working to protect her Bermagui home in semi-darkness and surrounded by a "ring of fire".

She said the political response to the disaster had been "very poor" and more needed to be done to support volunteer firefighters. "They are so bloody tired," she told AFP.