Melbourne recycling plant continues to smoulder

Fire crews from Victoria and interstate are continuing to battle a blaze at a Melbourne recycling plant which is under control, but will burn for several more days.

Firefighters have now spent a third night battling the massive inferno at SKM Recycling in Coolaroo which started on Thursday morning.

It was deemed under control yesterday, but bails of compacted recyclables including plastic and cardboard continue to smoulder today.

Fire crews are using excavators to pull the recyclables apart to attack the fire within, but the process is slow and expected to take a number of days, a Metropolitan Fire Brigade spokeswoman said.

Interstate crews still on site assisting Victorian authorities.

Once the bails are broken down they are being doused with foam and water to prevent the toxic smoke from escaping into nearby neighbourhoods.

At the peak of the fire on Friday, people were evacuated from their homes in Dallas and a number of people were treated in hospital and by paramedics at an evacuation centre.

The state government announced yesterday a joint taskforce will be set up to audit every waste facility in the state with input from the Environment Protection Authority, MFB, CFA and Emergency Management Victoria.

Environment minister Lily D'Ambrosio also announced an interim waste management policy that will force facilities to better store materials to minimise health and environment risks.

"We are taking immediate measures to ensure better protections for Victorians and our environment," Ms D'Ambrosio said.

The policy will stay in place for 12 months until a permanent solution is found.

Opposition emergency services spokesman Brad Battin said the government needed to ensure recycled material wasn't stockpiled to prevent similar fires from happening again.

"We need to ensure we have a plan that reduces the stockpiling that's there," Mr Battin said.