A search is underway for six kayakers after kayaks and other gear was found abandoned on the flooded Clarence River just before 5pm.
A slip blocking the Clarence River near Kaikoura breached about 4.20pm and a large wall of water was flowing downstream.
The wall of water was 15m high when it built up at the dammed-up debris in the river.
Civil Defence said it appeared the kayakers had left the river seeking higher ground.
Anyone who had information about the kayakers was asked to phone 03 520 8400.
Civil Defence said it would take three to five hours for the water to reach the coast, which was 50km from the blockage.
Police and ground crew were evacuating any residents who are at risk.
Authorities urged everyone to stay away from the river bed and surrounding floodplain areas.
Meanwhile 16 rafters reported missing on the river this afternoon have been found.
Police contacted the rafters using a satellite phone and tracked their location.
Emergency services on the ground rushed to the river.
Civil Defence urged residents in surrounding areas to move to higher ground immediately.
Meanwhile, structural engineers are checking buildings in Kaikoura and military choppers are ferrying people and resources to the town.
A welfare centre was set up at Kaikoura Marae about 5pm.
Power was gradually being restored in Kaikoura, but sewerage systems and water supplies were still down and it could be a while before they were back up and running, Civil Defence said.
Power, communications, sewerage and water were all cut off by a colossal earthquake which shook the town early today.
There was still no way in or out of the town by land. Emergency services from Nelson and Christchurch were airlifted in to help local response teams.
Civil Defence was considering using private bores to supply water and urged residents to conserve water.
One person died after a historic Kaikoura homestead collapsed when the 7.5-magnitude quake hit at 12.02am today.
He was believed to be Louis Edgar, who lived at the house with his wife, Pam.
A Fire Service spokesman said a man had died at the property, but two women, one of whom was 100 years old, were rescued from the rubble.
Police radio communication systems were working and cellphone networks would soon be live again.
Four police officers were flown to Kaikoura from Nelson and more officers were standing by to travel to the town tomorrow if needed.
Shops were closed and locals could not buy food, fuel or water this afternoon.
About 1000 tourists were in the town, Civil Defence said.
Police were rescuing travellers trapped in the town's northern and southern outskirts.
The occupants of at least six campervans in Kaikoura's north would be airlifted to the Ward Welfare Centre and the people stranded just south of the town would be flown further south, Civil Defence said.
A Fire Service spokesman said a six-strong urban search and rescue squad were sent from Christchurch.
The team touched down in Kaikoura around noon, but no further information was available because communications were poor, he said.
State Highway 1 will remain closed to the north and south of Kaikoura until further notice.
Transport Agency (NZTA) highway manager Neil Walker said the damage to the road would be assessed when the areas could be safely visited. Poor weather and the possibility of strong aftershocks were causing concern.
The agency was working with Kaikoura District Council to open the old inland SH70 route between Culverden and Kaikoura within the next few days, Walker said.
Staff and contractors were also liaising with KiwiRail, police and local emergency crews to get people out of cut-off areas as quickly as possible.
The Defence Force (NZDF) sent a P-3K2 Orion surveillance aircraft and two NH90 medium utility helicopters to survey the damage to areas surrounding the town.
Photos taken during the flight showed massive rockfalls and extensive damage to the roads in and out of Kaikoura.
Air Commodore Darryn Webb, the acting commander joint forces New Zealand, said routes to the town from Christchurch, Hanmer Springs and Blenheim were all impassable.
Defence crews would continue to help Civil Defence workers assess the extent of the damage to parts of North Canterbury and the upper South Island, Webb said.
Spirits lifted in Waiau as Richie arrives
Mary Kimber's precious porcelain lies in tiny pieces throughout her house.
Some had been passed through several generations, others she had collected from her travels over the years.
But although she lost several pieces in this morning's quake, she's just glad that everyone in her small town of Waiau has escaped with their lives.
Kimber is the principal of the three-teacher, 56-pupil Waiau Area School and has been for 25 years.
Today, after being cleared with zero to 10 per cent damage, the school turned into the local Civil Defence headquarters as families came together not only for company, but also because their homes are uninhabitable.
Kimber says she's lucky. Although all her kitchen cupboards have been emptied on to the floor and paintings left askew on the wall or on the floor, she can still sleep in her bed.
Some families have burst water or sewage pipes to contend with.
Kimber said as soon as the quake was over she rushed outside and discovered everyone else did, too.
They all then moved over to the school. Some brought food, groceries they'd happened to buy that day, others mattresses and bedding. It was all shared amongst those gathered.
Spirits were briefly lifted this afternoon when former All Black Richie McCaw made a flying visit in a helicopter.
Residents said he touched down briefly to pick up a medic before taking off again.
It was the highlight of the day for 4-year-old Benji McSkimming.
Benji's mum, former Taupo woman Courtney McSkimming, said he's the All Black great's biggest fan and didn't get scared of the quake because he knew Richie wouldn't have.
The family - including partner Paul Clemens and 2-year-old daughter Kenzie - spent the night at the school.
Their house "isn't very nice" at the moment, so they're not in a hurry to go home.
They, like many other local families, will again bunk down at the school tonight.
Food from the local Waiau Lodge Hotel will be donated, as there's no power to keep it frozen, and cooked on a barbecue tonight for a giant, community feast.