Video footage shot by Reuters on Sunday showed plumes of black smoke billowing into the sky and trees still ablaze, with firefighters in helicopters trying to put out the fires.
Australia has been battling hundreds of blazes since September in an unusually prolonged summer wildfire season that was fuelled by three years of drought, which experts have attributed to climate change.
This is the first such warning for Canberra since 2003.
The Animal Rescue Craft Guild has supplied thousands of rescue groups around the country with protective pouches and blankets to help wildlife affected by Australia's bushfires.
“The fires are still burning. And they’ll be burning for months to come,” Prime Minister Scott Morrison said. "And so that’s why I outlined today that this is an initial, an additional, investment of $2 billion [Australian dollars]."
Scott Morrison said 23 deaths have been confirmed so far this summer, including the two in a blaze on a highway on Kangaroo Island off the coast of South Australia.
Townpeople in Cobargo, New South Wales yell at Morrison, make obscene gestures, and call him an "idiot" to criticise him for lack of equipment to deal with bushfires in town.
A fire in a poor neighbourhood of the coastal Chilean city of Valparaiso destroyed dozens of houses and firefighters struggled to control the blaze, authorities say.
Opposition Labor Party has pressed the government to consider compensation for volunteer firefighters. Calls for Prime Minister Scott Morrison to resign have grown after the public learnt he was holidaying in Hawaii during the bushfire emergency.
Australian Prime Minister Morrison visited the Rural Fire Service (RFS) headquarters in Sydney, after returning on Saturday night from a holiday in Hawaii that drew sharp criticism as the wildfires crisis in his home state deepened.
Australia’s most populous state was paralysed by “catastrophic” fire conditions amid soaring temperatures, while one person died as wildfires also ravaged the country’s southeast.
Meanwhile, the country's most populous state of New South Wales declared a seven-day state of emergency on Thursday as dire conditions fanned around 100 wildfires.
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