WHITTLESEA: Prince William reflected Thursday on the "terrifying" force of the wildfires that devastated southeastern Australia last year during a tour of towns hit by the blazes.

William, 27, flew to the southern city of Melbourne where he spoke to people about last February's so-called Black Saturday firestorm, which killed 173 people and flattened entire towns.

"It's terrifying what it can do isn't it?" he remarked, leafing through photographs of the damage.

The second-in-line to the British throne released a video tribute to survivors and signed a book of condolences following the fires, and he asked that a tour of the worst-hit areas form a key part of his visit Down Under.

He quizzed Victoria state premier John Brumby about the firefighting operation and reconstruction efforts at a meeting in the town of Whittlesea, where hundreds of homeless and traumatised victims took refuge last February.

Scores of people perished in the area, including in the worst-hit town of Kinglake, where 42 lost their lives.

Many of the thousands whose homes were destroyed have resettled in Whittlesea, and an enthusiastic crowd lined the streets to greet the young prince, whose visit comes just two weeks from the tragedy's first anniversary.

"I think it lifts everyone's spirits and puts a smile on your face, and that's what it's all about these days," resident Natasha Skehan told state radio.

"I think we realised that after last year."

William took in the fire damage in a driving tour of affected towns before attending a barbecue lunch with survivors. He wore a yellow ribbon in memory of those who died in the blazes.

He is due to return to Melbourne to deliver his only official speech of the visit at an evening reception to celebrate Australia Day, the January 26 national holiday that commemorates the arrival of white settlers in 1788.

Media reports suggest he will briefly drop in at the Australian Open tennis before taking a late-night commercial flight back to Britain.

Several thousand well-wishers gathered in Sydney's harbour district Wednesday hoping to catch a glimpse of the young prince on his way to a barbecue lunch on the waterfront.

In a brief speech William thanked the Australian public for embracing him with such enthusiasm, and joked he had been so thrilled with his reception he was thinking about buying a house in the harbour city.

The young royal requested the trip to Australia as a way to get to know the country and its people, following official duties in New Zealand, where he represented his grandmother Queen Elizabeth II for the first time.

William last visited Australia in the arms of his popular late mother, Princess Diana, when he was just nine months old in 1983, and commentators have said his ready humour and laid-back manner gave him the "Diana touch" with the public. Related article: Diana remembered as William tours Sydney

His popular tour has reignited debate over whether Australia should become a republic, with some opinion-formers suggesting he had boosted the monarchist cause.

But Deputy Prime Minister Julia Gillard said there were "no present plans" to have a referendum on becoming a republic, a move the Australian people voted against in 1999.