Melbourne, Feb. 12 : Police in the Australian state of Victoria have launched a manhunt for a "serial arsonist" after clearing the two men they had arrested earlier of any wrongdoing in connection with bush fires ravaging the region.

Officers confirmed to the Daily Telegraph that a serial arsonist was being investigated in connection with the Gippsland blaze that has so far claimed 21 lives.

According to the paper, over 150 detectives are working on separate investigations related to the fires across the state. The official death toll remains at 181, but it is expected to rise.

Earlier, police in the state''s northeast arrested two men this morning near Taggerty after reports of "suspicious behaviour between Seymour and Yea in relation to the fires".

A police spokeswoman told Sky News that they were later released without charge.

Police are close to releasing a photo of the Gippland suspect, Deputy Commissioner Simon Overland said, but he would not comment on a rumor that the suspect is a teenager.

"There has been a serial arsonist in this area for some period time and we have been working on that," Overland said.

"It''s too early to say whether it was that person that was responsible for the fire that happened on Saturday, but that''s obviously something we will follow through," he added.

The fire in Marsyville is also being investigated for possible arson because of its ferocity. So far eight deaths have been confirmed in the town but it is feared up to 100 of the town''s 519 people might have died.

Victorian Premier John Brumby today confirmed a 15-hectare grass fire at Mansfield, started on Wednesday, was deliberately lit.

Water bombing aircraft were used to quell the fire, which broke out in a pine plantation southeast of the town.

Fires in East Kilmore, between Yea and Seymour, started on Saturday and merged with the Yea-Murrindindi fire creating the massive Kinglake Complex fire. This fire, which was not started by arsonists, has burnt almost 230,000 hectares of land, destroyed 550 homes and killed at least 147 people in a wide area from Wandong, north of Melbourne to Marysville and Taggerty.

Experts have traced the starting point of the deadly Kinglake fire to a paddock on a hill in Kilmore East. (ANI)