The owners of a waste management company in Melbourne are under investigation over a massive rubbish fire that continues to burn in the northern suburbs.

Residents have been warned to stay away from the potentially toxic blaze which caused the Hume Highway to be shut in both directions.

It is believed lightning sparked the fire at the rubbish pile behind a factory in Somerton at about 2.30am today.

Around 150 firefighters and aerial bombing crews are battling the blaze which continues to burn this evening.

As fire crews battled the blaze throughout today, fears of toxic smoke and asbestos grew.

Residents in surrounding suburbs are still advised to stay indoors, close windows and shut off air conditioning.

The specialist recycling plant next door has been spared, however workers are furious.

The stockpile is attached to a business named Ecotec Woodwaste, which made money from operating as a private dumping ground.

The former owner has recently been prosecuted for failing to comply with planning permits and council orders to clean up the site.

On Monday a court fined him $59,000 plus costs, while another employee will front a magistrate next week.

Spot fires have flared on the site before, with CFA officers deeming it an ongoing risk.

Firefighters are expected to battle this enormous blaze for days and will remain on scene to ensure it does not spread.