Dozens are feared dead on Vanuatu and up to 10,000 are homeless in the wake of Cyclone Pam - but the real extent of the devastation won't be known until contact can be made with all of the nation's 65 inhabited islands.

Aid agencies have confirmed at least eight people died when the category 5 cyclone smashed through Vanuatu on Friday night, severely damaging up to 90 per cent of houses in Port Vila. Other buildings, including the hospital and airport, were also badly damaged as winds of around 250km/h, and gusts peaking at around 320km/h, smashed the capital, leaving a trail of debris and destruction. A state of emergency has now been declared.

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Yesterday, the UN Office for the Co-ordination of Humanitarian Affairs said there were unconfirmed reports of 44 deaths in Vanuatu's northeastern islands after Cyclone Pam moved off its expected track.

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"A disaster of this magnitude has not been experienced by Vanuatu in recent history - particularly in terms of the reach of the potential damage and the ferocity of the storm," said head of OCHA's regional office for the Pacific, Sune Gudnitz.

Tropical Cyclone Pam had been downgraded to a category 4 cyclone. A severe weather warning has been issued for northern and eastern parts of the North Island, where heavy rain and south to southeast gales were expected from this evening through to Tuesday.

However, Unicef's Alice Clements said it was "impossible" at this stage to estimate how many had been injured or killed in the storm.

"We simply don't have telecommunications with other parts of the country and the entire country doesn't have power," she said.

"The true extent of this thing is going to become much clearer over time. We know it's serious, we just don't know how serious."

World Vision's Melbourne-based communications manager, Andrea Swinburne-Jones, who has been in constant contact with staff in Port Vila, said communications with outlying islands were yet to be established. Once they were the death toll may well rise.

Tanna, one of Vanuatu's southern islands, was of particular concern, Ms Swinburne-Jones said.

Residents in cyclone-ravaged Vanuatu hunkered in emergency shelters for a second straight night Saturday after venturing out to find their homes damaged or blown away by the powerful storm, aid workers said. Packing winds of 270k/ph, Cyclone Pam tore through the tiny South Pacific archipelago early Saturday, leaving a trail of destruction and unconfirmed reports of dozens of deaths.

Chloe Morrison, a World Vision emergency communications officer in Port Vila, said communications were so problematic that the aid group had not been able to account for many of its 76 staff on the islands and authorities had been unable to assess the extent of the damage.

She said the cyclone had terrified locals.

"People have been shocked by how devastating it was and how terrifying it was. Vanuatu is one of the most disaster-prone areas in the world - typhoons, earthquakes and tsunamis and yet this still shocked them," Ms Morrison said.

Late yesterday a New Zealand Defence Force Hercules, carrying aid supplies, staff from government agencies and the Red Cross, arrived in Vanuatu as New Zealand increased its immediate contribution to help countries hit by Cyclone Pam to $2.5 million.

Foreign Minister Murray McCully said the bulk of the money would go to efforts in Vanuatu.

"The situation is Vanuatu is not yet fully reported. We expect more grim news in the day or so ahead, but already the impact is clearly very significant."

Mr McCully said an initial assessment of the main island revealed a huge challenge.

"About 90 per cent of the buildings have been damaged to some degree, and the prospect is up to 10,000 people homeless.

"We are still awaiting the results of a flyover of some of the outer islands. We expect the position there will be at least as difficult as it is on the main island."

Andrew McKie from the Red Cross said the storm had caused havoc in Port Vila.

"All the vegetation is gone, stronger houses appear to have been badly damaged and most of the informal housing areas, which is people who migrate from the outer islands into Port Vila for work, would have all gone. They were just rickety corrugated iron shacks," he said.

Relief supplies, including 1200 tarpaulins, 900 water containers and 240 first aid kits, were expected to arrive this afternoon, Mr McKie said.

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New Zealand Red Cross
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World Vision
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Oxfam New Zealand
Reporting team
NZ Herald: Teuila Fuatai, Kirsty Johnston, Isaac Davison, Nicholas Jones
NZME.: Patrice Dougan and Nikki Papatsoumas.