6.30pm: A Narooma Fire and Rescue spokesman gave the "all clear" and said residents of the caravan park have been allowed back in.
5.38pm: It is understood the fuel fumes have dispersed and residents will be allowed to return to the park in small groups.
5.23pm: The Batemans Bay Fire and Rescue Hazmat crew has arrived at the scene and a NSW Ambulance crew is on standby. Approximately 100 people have been evacuated from the caravan park near the Narooma bridge and a large section of the park has been blocked off. Eurobodalla Shire Council workers were doing a routine check when they detected an "explosive" level in the sewer system, a spokesman said.
"We have found fuel which has potentially been dumped in the sewer system, so we called Triple 000 to get the Hazmat crews here and now it is in their hands," the spokesman said.
He reminded the public never to pour flammable liquids or chemicals down a sewer.
"Anything can happen; there is potential for an explosion in this instance," he said.
They have pulled vents off drains to ventilate the area.
It is not known how long it will take for fumes to reach safe levels or for people to return to the park.
5.09pm: A Batemans Bay Fire and Rescue Hazmat crew has been sent to the scene to take readings.
In October last year, a Narooma preschool was evacuated after "a flammable and potentially explosive liquid" was detected at a nearby sewage station. At the time, authorities believed petrol had been discharged into the sewer.
4.12pm: Narooma Fire and Rescue Hazmat crew and Eurobodalla Shire Council workers are investigating a possible gas leak at Narooma Flat on Wednesday, October 9.
Just after 4pm, a Narooma Fire and Rescue spokesman said it was a Hazmat incident and crews were still investigating.
"Gas was detected at a pumping station down on the Flat, near the caravan park," the spokesman said.