VANCOUVER, British Columbia (Reuters) - Thousands of evacuees who fled raging forest fires in Western Canada were allowed to return home on Friday as officials released the first damage estimates from the blazes.

British Columbia said at least C$8 million ($5.8 million) in residential property was destroyed by the largest of three fires burning near Kamloops, but they are still calculating the cost of lost businesses -- including a major sawmill.

Officials lifted evacuation orders for nearly 3,000 people forced out near Kamloops but said it was still unsafe for several hundred others to return to the hard-hit community of Barriere.

Firefighter said Barriere was not directly threatened by the flames of the 180-square-kilometer (70-square-mile) fire burning out of control near the town about 300 km (185 miles) northeast of Vancouver, but said other problems had to be resolved.

"There is heavy smoke in the town and it is unsafe to return," said Brian McMurdo of the British Columbia Fire Commissioner's office.

Officials said the fire, sparked last week by a discarded cigarette, destroyed 65 houses and mobile homes and 99 other buildings. The number of businesses destroyed as not been released.

Tolko Industries Ltd. said its Louis Creek lumber mill was completely destroyed, and it could be up to six weeks before it decides what will happen to the nearly 200-employee facility, which was insured.

In southwestern Alberta's Crowsnest Pass region, the remaining 1,200 evacuees were also allowed home on Friday after crews made progress against a wildfire that threatened several mountain towns.

But with the 180-square-km (70-square-mile) fire still burning out of control, all area residents were on alert to flee again on an hour's notice.

No homes have been destroyed.

"We didn't honestly think that would be possible, but amazingly, through the efforts of everyone, that has been achieved," Crowsnest Municipality Mayor John Irwin said.

The biggest out-of-control fire now burning in Western Canada is a 300-square-km (116-square-mile) blaze in a sparsely populated area of British Columbia's Cariboo region, near Chilco Lake.

($1-$1.39 Canadian)

08/08/03 17:04 ET