Firefighters battling a huge grassfire in Queensland have witnessed a rarely seen destructive phenomenon - a fire tornado.

Crews fighting the fire near Thargomindah, in the state's far west, watched in awe as a massive fire tornado formed inside the inferno on Sunday.

Bulloo Shire Mayor John Ferguson says as the giant column of flame rose, it was photographed by a local woman.

"It went up about 300 metres in the air," he said.

"Then about 30 metres of flame broke off and flew about 400 metres over the fire break, which was the main road, and started another fire."