Kevin Rudd says no cap will be placed on federal spending in reconstruction of devastated neighbourhoods

Australian prime minister Kevin Rudd has vowed to rebuild communities destroyed by bushfires “brick by brick”.

The country's leader told MPs there would be no limit on federal spending as the government sought to reconstruct neighbourhoods devastated by the worst bushfires in the nation's history.

He said: “We have deliberately made the decision to place no cap on the Commonwealth's contribution to the recovery and reconstruction effort.

“We will rebuild each of these communities until one day we can look back and say these towns have been reborn.”

Nearly 10,000 homes were engulfed by flames after a four-storey-high wall of fire swept across 150,000ha of land in the state of Victoria.

Around 500 people have been injured and 173 are known to have died, though this number is expected to rise as search parties continue .

Rudd said that around £6.8m had been collected in charitable donations so far and appealed for more. The Australian Red Cross is also asking for money and clothes.