A man has been arrested after a suspicious fire engulfed an iconic and historic venue in Melbourne on Tuesday morning.

A blaze tore through the Caulfield Racecourse’s Norman Robinson stand, which is heritage listed, causing potentially millions of dollars in damage.

Police arrested the 51-year-old on Tuesday afternoon at Mordialloc Railway Station after reports of several grassfires in the area.

Investigators are probing whether the grassfires and grandstand fire are linked.

Earlier, footage emerged showing a man dragging a wheelie bin to an upper level of the Norman Robinson stand, adding extra paper and setting it alight, the Herald Sun reported.

FRV incident controller Dennis Smith said the fire caused “significant damage” to the Norman Robinson stand after starting in a bar on the first level.

“It is timber, so it burned pretty well. Also there’s a bar behind, The 1876 bar, that has also been impacted by this,” he said.

“As far as the grandstands on either side, there is a little bit of water damage but no fire [damage] thankfully.

“But that stand itself is significantly impacted.”

Smith said desperate early efforts from 17 fire crews stopped the blaze spreading any further.

“There are a lot of residents around here, but thankfully the wind wasn’t significant so it didn’t really impact [the surrounding area] as much,” he said.

Melbourne Racing Club chairman John Kanga said contingency plans had already been made for a race meeting scheduled for Wednesday.

“In my perspective, it’s unlikely [to go ahead at Caulfield] and we would probably move to Mornington tomorrow,” he said.

“We are gutted as a club, but we are keen to rebuild.”

Kanga said the damaged areas are among racegoers’ favourites.

“Both bars are very well frequented … I can assure [members] that we will rebuild it as good or if not better than what it was,” he said.

The response was escalated to a third alarm, which indicates a significant fire. Multiple crews battled the blaze before getting it under control about 7am.

One firefighter suffered a minor hand injury in the blaze and was treated in hospital.

Victoria Police have established a crime scene.

“Police are investigating a suspicious fire at the Caulfield Racecourse,” a statement said.

“No one was injured and the area was evacuated safely.”

There was an advice level warning for the nearby suburbs of Ashburton, Carnegie, Caulfield, Caulfield East, Caulfield North, Caulfield South, Glen Huntly, Glen Iris, Malvern, Malvern East, Murrumbeena and Ormond.

Traffic in the area surrounding the racecourse was also expected to be affected.

-with AAP