Firefighters on Sunday were trying to prevent the spread of the huge Gospers Mountain blaze when their controlled operation breached containment lines, a spokeswoman said.

The affected properties are thought to be in the Mount Wilson and Bilpin areas.

"There was backburning in the area and unfortunately due to the conditions they're burning in, it's taken one ember to cross over the wrong side and that's where it took a run and it was escalated to emergency warning and then we have had reports of homes lost in the area," an RFS spokeswoman told AAP on Monday.

RFS Commissioner Shane Fitzsimmons earlier said some of the affected properties may belong to local service members.

The sprawling Gospers Mountain fire - which has burned 380,000 hectares - stretches from the Lithgow area in the west, through the Hawkesbury area and towards the Central Coast in the east.

It was at "watch and act" alert level on Monday afternoon having been downgraded from emergency on Sunday.

The RFS spokeswoman says the backburning losses are "absolutely unfortunate" but she added such operations were critical to help contain the vast fire before hotter conditions arrive later this week.

"If we don't (backburn) then there's nothing to stop this fire, and there's heavily residential areas that it will look towards moving towards over the next days and weeks," she said.

Endeavour Energy on Monday said 450 customers were without power in the upper Blue Mountains after the Gospers Mountain bushfire damaged powerlines.

Affected townships include Bilpin, Berambing, Mount Wilson, Mount Tomah and Mount Irvine.

Australian Associated Press