An Australian father faced triple murder charges Thursday, accused of setting his home ablaze and locking the door with his seven children and their mother inside.

Three of the children - two boys aged two and six and a five-month-old baby girl - died in the weekend blaze in western Sydneys Lalor Park, police said.

The four other young children are in a stable condition in hospital and their 29-year-old mother has been released after treatment, police added.

The 28-year-old father, who is in hospital under police guard after emerging from an induced coma, was refused bail in a Sydney court on three counts of murder and five of attempted murder, court documents showed.

Police will allege this man is solely responsible for setting fires inside the premises, New South Wales detective superintendent Daniel Doherty told a news conference after the court hearing.

An accelerant had whipped up a large amount of fire and smoke in the home and the doors had been locked to prevent the family escaping, he said.

A neighbour very courageously forced his way inside, rescuing two boys aged four and seven and a nine-year-old girl, as well as the mother, Doherty said.

But the father allegedly prevented the neighbour from saving an 11-year-old boy.

Police then arrived, however, and had to wrestle with this man and wrestle the boy from his grasp because he was holding on to him, allegedly, and the boy was then rescued, the detective said.

A domestic dispute may have led to the horrendous murderous act, Doherty said.

Most of the children were the accused mans biological children but in any case they are his family, they are his kids, he said.

Its not something that I will forget about very quickly. (AFP)