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Fears about toxic smoke from a huge fire at a plastics company in an Eastern Ontario community forced the evacuation of two schools and dozens of homes for much of yesterday.

Nearly 300 people were directly affected by the state of emergency declared by the mayor of Cobourg, a small town about an hour east of Toronto, not long after the fire broke out in the late afternoon at Horizon Plastics Co. Ltd.

Flames shot from an outbuilding at the sprawling company -- which covers 300,000 square feet in an industrial part of the community -- and thick pillars of black smoke were soon climbing into the air.

Mayor Peter Delanty said that fire crews had reported "tornadoes of flame" rising into the sky.

Calling it a precaution, city officials decided to remove all those in the path of the smoke.

It was not until late in the evening that Mr. Delanty announced that Ministry of Environment officials had given the area the all clear.

"Because of the extreme heat of the fire, plastic [was]consumed," he told reporters at a news conference.

"Because of the extreme heat, there was no evidence of toxins in the air."

Mr. Delanty said the town was doubly lucky in that the wind was blowing the smoke over largely agricultural land.

The 75-odd people affected by the evacuation order who turned up at the local Salvation Army quickly returned home as soon as Mr. Delanty gave the signal, Salvation Army Major Lynn Cummings said. Volunteers simply switched gears and began making sandwiches and coffee for the fire crews.

Witnesses said that the fire was confined to one building on the property of the factory, though firefighters did enter the main building to hose down walls, in a bid to prevent the fire from spreading.

By mid-evening, crews appeared to have a firm handle on the fire, helped by a foam truck from CFB Trenton.

Mr. Delanty paid tribute to the work of all the fire crews in stopping the blaze from spreading.

"They saved those building, there's no doubt about it in my mind."

Horizon Plastics, which makes products ranging from toys to building supplies, employs about 300 people when working at full capacity.