[J4Baggers]

My 250kva generator is earth however there is now smoke coming from the pit that the generator is earthed

[tkrussell]

Using an clamp on amp meter , measure the ground wire connecting to the rod, to determine if any current is flowing.

That will need to be corrected.

Could be a poor soil condition causing the ground resitance to be too high, still should not have high amps flowing to ground thou.

There is a clamp on ground rod resistance instrument available to measure the resistance of the rod.

[hfcarson]

J4, along with the recommendations of TK, you should be carefully reviewing the
Grounding and if the neutral to ground connections are correct. If this is not a separately
Derived system, the neutral should not be bonded to the ground. This may have something to do
With the "hot" ground rod if installed incorrectly.