Accuracy of short circuit analysis depends on the fault modelling. This paper addresses the implementation of a new fault model consisted of a serial connection of the tower footing resistance and arc resistance. In existing approaches the value of the arc resistance at the fault location must be known in advance, or it is totally neglected from the consideration. The fault current and arc resistance are mutually dependent, so the short circuit analysis cannot be performed directly. A new solution for this problem is the use of an iterative procedure, calculating fault current and arc resistance iteratively. The new method presented in this paper calculates short circuit currents and arc resistance simultaneously. Results of fault analysis and arc resistance calculation in two test network are presented and discussed in the paper.