A company responsible for a tip in suburban Melbourne that has been on fire for nearly six years, close to homes, may be allowed to keep its landfill licence and avoid criminal proceedings after a stunning about-face from the state's environmental watchdog.

In a move residents describe as "gobsmacking", the ABC can reveal the Environment Protection Authority (EPA) is considering reinstating Barro Group's landfill licence, despite now saying it could be another four years before the fire is completely extinguished.

Why will it take three years to put out an underground fire in Melbourne's west? It's complicated

The fire at the Sunshine Landfill was first identified in November 2019, after air got into compacted waste.

That would mean residents would have had to put up with living next t

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