A FIRE that burned only metres from houses in Baranduda had the potential to threaten lives and properties, police say.
Children in a nearby house noticed the blaze burning in long grass behind Krueger Street in Baranduda on Saturday about 9.45pm.
Residents rushed to the scene and had largely extinguished the blaze before firefighters arrived.
Youths were seen running from the area.
While there were mild conditions at the time with low wind, Detective Leading Senior Constable Ian Deverell said the incident was concerning.
"If the weather had been different, the nature of the fire would have been extremely difficult to manage. It would have put life and property at risk," he said.
"It's very concerning for the residents who back on to the Baranduda Ranges."
Police and fire investigators returned to the scene on Sunday.
"Police treat these fires very seriously," Detective Leading Senior Constable Deverell said.
"The potential of this fire could have been massive.
"If anyone has seen any youths in the area, running from the scene, contact Wodonga crime investigation unit."
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They were seen running away on Margaret Court Drive.
Security camera footage from nearby homes is being reviewed.
Geoff Draper's home is only metres from the scene of the blaze.
"It was well done by the neighbours to halt the fire," he said.
"They grabbed shovels and whatever tools they had.
"Someone turned up with a nine kilogram fire extinguisher, which really knocked it on its head as the CFA turned up.
"It's a bit of a concern being so close to houses."
Two dirt tracks helped contain the spread of the fire, which burnt only a few metres away from trees at the base of the Baranduda Ranges.
Anyone with information can contact police on (02) 6049 2600 or Crime Stoppers on 1800 333 000.