The possum attempted to run across two power lines and caught alight and then fell into some dry tussock.
Nick Edwards, spokesman for Wakatipu DoC, said that it was not the first time a possum on fire has started a fire, even though it does sound unusual. Mr Edwards said that the possum never stood a chance of surviving.
The fire burnt 50-hectares in the Rastus Burn Recreation Reserve. It took crews of firefighters and three helicopters twelve hours to bring the fire under control.
A crew of firefighters and one helicopter will stay to prevent any flare-ups.
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