Spanish authorities allowed residents near a giant tyre dump blaze to return home on Saturday, saying that toxic fumes billowing from the rubber heap posed less of a risk although the fire has yet to be extinguished.

The news came as it emerged that the European Commission had contacted Madrid over the illegal dump, the first step in a procedure which it can launch when it suspects a member state of infringing EU law.

Some 10,000 people living in the town of Sesena near the Spanish capital evacuated their homes on Friday after the dump went up in flames in a suspected arson attack.

A massive black cloud of fumes billowed into the air, prompting widespread health concerns.

The government of Castilla-La Mancha, where the dump is located, said on Saturday it had lifted its evacuation order "as a result of the reduced risk for residents in the area" as firefighters brought the blaze under control and the cloud reduced in intensity.

The blaze broke out before dawn on Friday in the dump that stretches over 10 hectares - the equivalent of about 10 rugby fields - and straddles the Castilla-La Mancha and Madrid regions.

Health hazard

The massive stack of tyres started to form in the 1990s when a company began using the site as a temporary depot for old tyres due to be recycled, and it grew from then on.

It was declared illegal and environmental groups had long warned that it posed a health hazard, but authorities only recently started acting on the problem, inviting bids to empty the dump and destroy the tyres at the end of last year.

On Saturday, the European Commission, the European Union's powerful executive, said it had got involved too.

"There were contacts and requests of information by the Commission to the Spanish authorities on landfills, including the one in Sesena," Commission spokesman Christian Wigand told AFP.

A request for information is the first step towards an infringement process, which if officially launched can lead to EU court proceedings.

Under a EU directive, used tyres cannot be dumped in landfills.

Tyre dump blazes are notoriously difficult to extinguish and have been known to last for months and even years, as tyres often continue to burn inside even if they are extinguished from the outside. They also reignite easily.

But Francisco Martinez Arroyo, environmental minister for the Castilla-La Mancha government, told Spanish radio the fire would likely be extinguished in "two or three days."

In a bid to alleviate health concerns, Madrid's emergency services tweeted that air quality measuring stations continued to give normal readings.

Authorities nevertheless told residents returning home to keep their windows closed.