The Foreign Office has updated its advice to British travellers, saying it is “increasingly possible” that a volcanic eruption could occur.
Residents of a fishing town in south-western Iceland have left their homes after fears over a potential volcanic eruption caused civil defence authorities to declare a state of emergency in the region.
Police decided to evacuate Grindavik after recent seismic activity in the area moved south toward the town and monitoring indicated that a corridor of magma, or semi-molten rock, now extends under the community, Iceland’s Meteorological Office said.
The town of 3,400 is on the Reykjanes Peninsula, about 30 miles south-west of the capital, Reykjavik.
The Meteorological Office warned: “At this stage, it is not possible to determine exactly whether and where magma might reach the surface."
Authorities also raised their aviation alert to orange, indicating an increased risk of a volcanic eruption.
Volcanic eruptions pose a serious hazard to aviation because they can spew highly abrasive ash high into the atmosphere, where it can cause jet engines to fail, damage flight control systems and reduce visibility.
A major eruption in Iceland in 2010 caused widespread disruption to air travel between Europe and North America, costing airlines an estimated three billion dollars (£2.45 billion) as they cancelled more than 100,000 flights.
The evacuation comes after the region was shaken by hundreds of small earthquakes every day for more than two weeks as scientists monitor a build-up of magma some three miles underground.
Concern about a possible eruption increased in the early hours of Thursday when a magnitude 4.8 earthquake hit the area, forcing the internationally known Blue Lagoon geothermal resort to close temporarily.
The seismic activity started in an area north of Grindavik where there is a network of 2,000-year-old craters, geology professor Pall Einarrson, told Iceland’s RUV. He said "the magma corridor is about six miles long and spreading".
He added: “The biggest earthquakes originated there, under this old series of craters, but since then it (the magma corridor) has been getting longer, went under the urban area in Grindavik and is heading even further and towards the sea."
Information on the Foreign Office's website reads that it is “increasingly possible” that a volcanic eruption could occur.
The update states: "Earthquakes and indications of volcanic activity have increased above normal levels on the Reykjanes peninsula, southwest of Reykjavik.
"The Icelandic authorities continue to monitor the area closely, particularly the area northwest of Mt Thorbjörn near the Svartsengi power plant and the Blue Lagoon. On 10 November, a Civil Protection Alert was declared after an intense swarm of earthquakes.
"The town of Grindavík was evacuated as a precaution. Some roads have been closed and visitors are advised to stay away from the area. Keflavik International Airport is operating as normal.
"While there is no current eruption, it is increasingly possible that one could occur."