It is unclear how long the tyres have been stored there, but Michael Knight, the owner of Katherine's waste management company M.T Bins, said it was an "accident waiting to happen".

He said Katherine Town Council should have transported the tyres for recycling long ago using the $130,000 allocated to remove "legacy tyres" from the municipality, in the council's 2018-19 budget.

The council is working with the NT EPA to ensure the clean up after the fire is acceptable. It is also working to remove dumped tyres from the municipality.

Emergency crews are yet to determine the cause of the fire, which blazed through bush land from about noon on Monday, July 1.

The Katherine Fire Brigade worked quickly to manage the raging flames, but strong winds fanned a large cloud of black and toxic smoke emitted into the sky.

The NT Department of Health warned residents to stay clear from the area, even days after the smoldering tyres had been covered with dirt.

On behalf of the NT Environment Protection Authority, officers from the Department of Environment and Natural Resources will be carrying out an investigation into the circumstances which led to the fire.

A spokesman from the NT EPA said the tyres still need to be "cleaned up" to a satisfactory level.

"Monday's incident is a clear reminder to everyone, including landowners and industry, that waste tyres pose significant increased environmental and health risks when they catch fire," the spokesman said.

"People with waste tyres should also be aware that along with environmental and health risks, come considerable clean up and disposal costs once a fire has been extinguished."

The NT EPA has been dealing with a number of significant waste tyre issues recently including several around Katherine.

Katherine Town Council is facing mounting pressures to fund a new tip, estimated to cost $40 million, as the current one is at capacity and has reached its expiry.

The NT EPA said "waste tyres should only be disposed of at a licensed waste facility and-or collected by a licensed waste handler".

"Tyres are a listed waste and must be managed in accordance with the Waste Management and Pollution Control Act 1998 and its Regulations," the spokesman said.

He said tyres could be reused for approved structural purposes or barriers and could be crumbed for recycled uses such as new tyres, surface coatings, playground surfaces, re-treading and for tyre-derived fuel.

The Katherine Times has put questions to the council including asking for the reason the tyres had not been transported for recycling.

"KTC is working closely with the NT EPA to ensure clean up and remediation of the tyres is acceptable," a council spokeswoman said.

"The use of dirt to extinguish the fire was an appropriate, short-term measure and a determination about what happens to them will be made at the conclusion of the NT EPA investigation."

In a statement released on July 2, Katherine Town Council said it recognised the tyres were an issue and in the 2018-19 budget allocated $130,000 to remove tyres from the municipality.

"This project has commenced and since has seen 200 tonnes of legacy tyres being removed and transported to Adelaide," the statement said.

"This was year one of a three-year planned approach to the legacy tyre issue.

"Legacy tyres were stored at both the Waste Management Facility and Katherine Showgrounds.

"Environmental risks were assessed and found the Waste Management Facility was the highest for removal of tyres considering the likelihood of fires and the proximity to waterways."

The NT EPA spokesman has confirmed the use of dirt to extinguish the fire was an appropriate, short-term measure.

"A determination about what happens to them will be made at the conclusion of our investigation," he said.

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