Singapore said Saturday that it would pursue local firms found to be involved in starting forest fires in Indonesia, as Greenpeace said the blazes were on palm oil plantations owned by Indonesian, Malaysian and Singaporean companies.

Smog has engulfed the city-state with fluctuating levels rising to a record high Friday, although they had dropped to "moderate" by Saturday afternoon, giving beleaguered residents relief that was predicted to be temporary.

Foreign Minister K. Shanmugam told a press conference Saturday that Singapore would investigate possible legal action against domestic companies responsible for the fires.

"I have asked the attorney-general to consider what is it that we can do in Singapore if such companies can be proved to have contributed in some way (to the fires)...We will do everything we can do," he told a press conference.

"We will offer no succour or refuge if the actions of the companies have indeed been illegal in Indonesia and impacted on Singapore," Shanmugam said.

He pressed Indonesia to provide evidence.

"We would have to depend on Indonesia to give us the evidence...Indonesian investigation authorities need to be on the ground, I cannot send my police officers in there to investigate," he said.

Environmental group Greenpeace said in a statement on Saturday: "NASA hotspot data in (Indonesia's) Sumatra over the past 10 days (11-21 June) has revealed hundreds of fire hotspots in palm oil concessions that are owned by Indonesian, Malaysian and Singaporean companies."

Shanmugam told the press conference that he would raise the regional smog problem at next week's Association of Southeast Asian Nations (ASEAN) meeting.

He added that the city-state would pursue the matter at other forums if the ASEAN foreign ministers' meeting in Brunei next week produced no "concrete results".

In a separate interview with local media, Shanmugam, who is also Singapore's law minister, said Singapore would "take all steps even if it means that our neighbours are upset".

Indonesia last week sought to shift some of the blame for the raging forest fires on Malaysian and Singaporean palm oil companies that had invested in Indonesia.

Indonesia's environment minister told the Antara news agency on Saturday field researchers had identified 14 firms responsible for the fires, identifying one of the companies as Malaysian.

"We found an indication that one of them came from Malaysia. We have found no other foreign firms coming from other countries," he told Antara.

A senior presidential aide Kuntoro Mangkusubroto said Friday that the fires happened in concession areas belonging to two paper producers.

Singapore's smog index reached an all-time record level of 401 on Friday.

It hovered over the "hazardous" 300 level on Saturday before dropping to a "moderate" level of 73 by the late afternoon.

Government guidelines advise the public to "avoid all unnecessary outdoor activity" at levels above 300.

The haze crisis has had a dramatic impact on life in Singapore, with its residents scaling back their activities in a bid to protect themselves.

But residents rejoiced late Saturday after seeing clear blue skies for the first time in almost a week.

Shoppers eagerly returned to posh shopping district Orchard Road -- many still with their protective face masks on -- as the skies started to clear during lunchtime and social media postings were full of cheerful messages after days of gloom.

Residents of private condominiums began using their swimming pools and tennis courts again.

However, broadcaster Channel News Asia's website quoted the environment agency as saying that the improvement "was due to a temporary area free of dense haze upwind of Singapore" and "transient changes in the local wind conditions" before the haze returns on Sunday.

Southeast Asia's previous major haze crisis in 1997-1998 caused widespread health problems and cost the regional economy billions of dollars as a result of business and air transport disruptions that lasted for weeks.