Many Christchurch small businesses still face potential oblivion, even as the city takes the first steps to post-earthquake recovery, because their insurance will not cover the cost of rebuilding.

Some community leaders warn that much of the central city could pass into the hands of banks because many mortgages give lenders first priority for insurance payouts.

They are calling for community involvement in the city's rebuilding, possibly through a "Christchurch Regeneration Trust" modelled on an Inner City Trust which led the rebuilding of Northern Ireland's second-biggest city, Derry, after it was damaged in battles between protesters and British troops in the 1970s.

"If you are on a block of land in the middle of Christchurch with an average value of $1.3 million, but with an insurance value of $300,000, and you owe the bank $500,000, how do you pay off the mortgage?" asked Lindsay Jeffs, manager of the Christchurch Small Business Enterprise Centre and a part-time lecturer in not-for-profit management at Auckland's Unitec polytechnic.

"So the community is going to have to take some ownership of that land because I don't know how you are going to be able to sell it as a private individual."

Mr Jeffs, who spoke at a community economic development conference at Waitakere last week, said many small businesses were not insured for the full replacement cost of their buildings - let alone for the land, which is generally not insured apart from Earthquake Commission cover of the first $100,000.

Property Council South Island vice-president Alan Prescott said this week that no figures were available but many building owners had insured only the indemnity (existing) value of their buildings rather than the cost of replacing them.

"In Christchurch, because of the age and condition of some of the buildings, people couldn't get replacement value. They could only get indemnity value. And some chose to pay for only indemnity value," he said.

"The other thing I've heard is that people might elect to take indemnity cover even when they have replacement cover, because the insurance companies won't pay out the top-up [to full replacement value] until the rebuilding is actually undertaken.

"So there is the potential to get the indemnity payout and leave the building empty."

Mr Prescott said rebuilding would depend on the banks who held most of the mortgages.

"The insurance companies may well pay out to the mortgagees [mainly banks] and the mortgagees are going to have to be prepared to re-advance it to the property owners," he said.

"But the mortgagees' willingness to advance money is determined by the rental income stream that is going to come through, so it's all a bit circular - mortgagees are not going to lend if there are no tenants lined up."

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said 52,000 people worked in the inner-city area bounded by Christchurch's famous "four avenues" - but most have now found temporary premises in the suburbs and about 20,000 might never go back to the downtown area.

More broadly, early estimates suggested that 70,000 people fled Christchurch altogether after the February 22 quake. Two separate new estimates this week suggest the loss a year out from the quake will be less, but still significant - Sapere Research put the likely loss at 8000 people, and ANZ Bank at 15,000.

National Distribution Union South Island secretary Paul Watson said about 60,000 people, including 9000 self-employed people, were still depending on the Government's temporary post-earthquake support, and about 20,000 of these were likely to be still unemployed when the support scheme ends at the end of May.

Most of the lost jobs are in retailing and tourism-related businesses such as hotels and restaurants, many of them still cordoned off in the downtown area.

Almost 1000 of the 4000 buildings between the four avenues are expected to be demolished, and Mr Townsend said most would not be replaced with anything like what was there before. "You are not going to build a 12-storey building," he said.

High-rise buildings that collapsed in the quake are likely to have scared people off other high-rises in the city for decades.

"The whole dynamic of the central city [will] change," Mr Townsend said. "It is going to be less dense, lower-profile, with a mix of business, residential, hospitality and retail."