The military demolition specialists who sparked a massive Blue Mountains fire during an exercise last week are suspected of having used too much explosive, Fairfax Media has learnt. As Defence continues to investigate the incident, a well-placed military source said it appeared the personnel taking part in the exercise had "massively exceeded" the amount of explosive suitable for the Marrangaroo training range. "There is a limit on how big the blast can be and what they were doing was well outside that limit," the source said. If you're a few grams over, it doesn't matter, but this wasn't just a bit of an overestimate. Defence admitted fault and apologised on Thursday for the State Mine fire, which has ripped through nearly 50,000 hectares of bushland in the Blue Mountains and destroyed at least three homes. The acting Chief of the Defence Force, Air Marshal Mark Binskin, said Defence was still carrying out its investigation and was also co-operating with the police inquiry. It was too early to say whether the Commonwealth would face a compensation bill for people who had lost homes or property, he said. The exercise on October 16 involved members of the Defence Explosive Ordnance Training School based at Orchard Hills, which trains elite explosives specialists for all three services - the army, air force and navy. These specialists play a key role in Afghanistan, defusing bombs and improvised explosive devices. Air Marshal Binskin said the detonation that sparked the fire happened at midday when the temperature was 23 degrees with light winds. There was no total fire ban, he said. They had their own firefighting equipment but faced the difficulty of working around other live ordnance on the range. The NSW Rural Fire Service was there within 30 minutes but the range still had to be cleared of explosives, Air Marshal Binskin said. It was considered too dangerous to go onto the particular site where the fire had started to burn, so they waited till it had cleared that area and then started to fight it. Barrister Andrew Stone from the Australian Lawyers Alliance said the Commonwealth could face legal liability if it turned out Defence had carelessly started the fire. "One example of what a court might find to be the requisite carelessness is setting of explosives in very dry bushland without adequate fire control precautions," he said. If that's what has occurred then there is a prospect of the Commonwealth being liable for the damage. Defence's investigation is considering whether proper procedures and safeguards were followed. It will also consider whether the regulations in place are adequate. Sources have told Fairfax Media many training areas don't have the required bushfire management plans. The rules are unclear on when live-fire exercises are permitted during fire danger. One section of the manual states they should not be carried out without "an authorised operational imperative" if the fire danger is "high" or above, while another section says they should not be done when there is a total fire ban.