UPDATE 04/03 - The Victorian Country Fire Authority has provided aerial footage of the blaze, which they say is about 80 per cent extinguished. 

Thermal vision in particular shows the scale of the remaining fire and the challenges in accessing and fighting it.

Residents of a small Victorian town continue to be blanketed by smoke and fumes from an underground coal fire, which authorities say will be investigated.

The town of Morwell is choking on the smoke of an underground coal fire at the nearby Hazelwood mine, which caught fire three weeks ago and has been inundating the down with ashy fumes ever since.

Government officials issued a warning late last week that “vulnerable” residents – including pregnant women, babies and young children, the elderly and the sick - should seek accommodation away from the plumes of smoke.

More than 1,000 remaining residents took to the streets on Sunday, most wearing face masks, to protest against the government they say has ignored their cries.

“The children of Morwell are sick. The adults of Morwell are sick,” one resident said.

“It has now become normal in Morwell to be suffering from smoke inhalation.”

After a rally in the town hall and a march through the streets, Greens Senator Richard Di Natale highlighted the lack of mining company representation.

“They get to make a profit from this mine,” he said.

“With that profit comes a social responsibility, and they are missing in action.”

Victorian Health Minister David Davis said the Government is doing what it should.

“The Government will in no way scrimp or save, we will spend whatever is necessary.”

Fire Services Commissioner Craig Lapsley says the crew of around 200 people working on the blaze around the clock have made some ground, but may be set back by warm weather this Tuesday.

He says a funding scheme has been set up to help Morwell residents in need.

“There is a structured appointment process that has been put in place,” Mr Lapsley told the ABC.

“[There's] $5,500 [available] for respite, $750 for relocation for individuals and $1,250 for family households. The respite assistance is a one-off.

“The $1,250 [for families] will be made on a weekly basis for those families for as long as this incident requires that sort of assistance and the Government has made that commitment.”

The Victorian Government claims it will conduct an inquiry into the fire.

Meanwhile, the smoke has become too much for Australia Post, which has suspended its deliveries to Morwell street addresses until the situation gets better.

Australia Post’s official statement read; “This decision has been made after careful consideration for the health and well being of our postal delivery officers... These are delivery rounds conducted on foot and by motorcycle and require the Postal Delivery Officer to be outside for periods of up to 5 hours.”