An exclusion zone remains in place and the public have been urged to follow the directions of police and emergency services while HAZMAT crews conduct further testing.

A NSW Police spokesman said officers were called to King Street at Merewether about 9:40am on Wednesday on reports a car was alight.

"Upon closer inspection it was determined that the vehicle contained a radioactive device and HAZMAT crews from Fire and Rescue NSW were called to the scene," he said.

"An exclusion zone has been created around the incident, and a golf course on King Street has been cleared of people.

"There is no ongoing threat to the public and all roads remain open."

A BURNT out vehicle potentially containing radioactive material has been cordoned off while HAZMAT teams, specialist radiation experts, police and firefighters assess the risk to the public.

Emergency services were called to the scene near Merewether Golf Course at 2am to reports a stolen vehicle had been burnt out on King Street.

When the owner went to recover it, he told firefighters the vehicle was fitted with a moisture density gauge containing radiation sources that is used to measure soil characteristics.

Fire and Rescue NSW Superintendent Adam Dewberry said the scene is currently stable.

"We've set up an exclusion zone around it and we're waiting for advice from specialist radiation experts," he said.

"The vehicle either caught fire or was set on fire last night, when the owner went to recover it he reported it should have a moisture density gauge on it.

"The concern is if it's still there and hasn't been stolen, whether the fire has damaged it - so we have firefighters and our hazardous material emergency teams using radiation detectors to determine if the gauge is in the vehicle and whether it's leaking."

He said the public should be assured that firefighters are working with agency experts to make sure it is safe and there is no risk to the public.

The area will be contained and decontaminated if required.

According to police, the Isuza Dmax was reported found at 2:06am this morning.

The owner later advised officers that the measuring instrument was on the back seat of the vehicle.

The device has been reassured for radioactivity and read 60 millisieverts from right beside it, seven to eight msv from 60cm and one to two msv from two metres.

At least four fire trucks and eight firefighters are at the scene, including specialist hazardous material technicians.

Superintendent Dewberry said the teams are working to recover and remove the risk.

"We want to make sure the scene is stable and secure and we are working to make sure all the appropriate actions are done to ensure the continued safety of the community," he said.

The vehicle was reportedly stolen from around the Merewether Heights area, where other residents have reported a number of attempted break and enters.

The details of this report are developing. It will be updated.

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