The inquiry into the management of Brisbane's big Wivenhoe Dam during last year's disastrous floods is turning into a political steamroller likely to flatten any chance of Labor retaining power in Queensland.

Amid reports of death threats and bodyguards for dam engineers, claims of blunders that made the floods worse, allegations of cover-ups and threats of a A$1 billion ($1.23 billion) lawsuit, Premier Anna Bligh is preparing for what is shaping up as her last stand.

Bligh's stocks soared after her handling of the floods and Cyclone Yasi, but the momentum has long been lost: the opposing Liberal National Party needs a swing of less than 5 per cent, and polls show it will probably succeed.

The inquiry and the election campaign are also being played out against the backdrop of further major flooding across the state and in northern New South Wales.

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Bligh pushed back the date of the poll to March 24 to ensure the inquiry's report would be released before the election.

The LNP is already taking advantage, with Opposition Leader Campbell Newman accusing Bligh of knowing of the dam's alleged mismanagement despite claims of ignorance.

"This issue is now lapping at the doors of the Premier's office," he said.

The inquiry, led by State Supreme Court Judge Cate Holmes, is investigating events that followed the vast inland tsunami that raged down the Lockyer Valley and into the dam's 7000sq km catchment area on January 11 last year.

As the dam's level became critical, engineers released water in a torrent that swept downstream, flooded the centre of Brisbane and inundated thousands of homes and businesses.

The manner and timing of the release is now under serious question, as conflicting evidence and allegations of mismanagement and "fictional" reports create an increasingly dark picture at the inquiry.

With passions high, dam operator Seqwater has sent engineers John Tibaldi and Terrence Malone on special leave and provided 24-hour bodyguards after media reports of death threats against the men.

Police have said there is no evidence of threats, but Seqwater is keeping the guards on duty "as a precaution".

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Worse problems lie in store.

Law firm Maurice Blackburn and Australia's largest litigation funder, IMF, are investigating the potential for a class action against the Government if the inquiry finds incompetence or mismanagement.

Hundreds of businesses and homeowners have expressed interest in a lawsuit in the event the inquiry supports allegations that the timing and nature of the decision to release water from the dam increased the impact of the flood downstream.

"There are allegations, or there is evidence, that tends towards a conclusion that insufficient water was released in a timely manner, such that it became imperative to let a lot of water go at the one time, which may have caused unnecessary loss to communities downstream," IMF Australia executive director John Walker told ABC radio.

Evidence presented to the inquiry has alleged dam engineers did not follow strategies laid down in the operating manual and they should have released larger volumes of water before the flood's peak.

Engineers have further been accused of colluding in the fabrication of the final report to the Government in a bid to conceal their mistakes.

Counsel assisting the commission Peter Callaghan described the report as "a fiction ... a reconstruction, written in hindsight [that] does not represent a single thing that actually happened".

The engineers have rejected the claims.

But evidence given by Seqwater grid manager Dan Spiller and by State Water Minister Stephen Robertson has contradicted the official report finalised in March.

Meanwhile, the towns of Roma and Mitchell have begun to clean up after floodwaters inundated hundreds of homes and forced residents to evacuate.

Officials are now trying to find long-term accommodation for people who cannot return to their homes.

In NSW, flooding has continued along the mid-north coast, with people rescued from cars and houses around Port Macquarie and Taree, new warnings of flash flooding, and continued flood warnings for inland rivers.

Thousands of people will remain isolated for weeks, with more expected to be cut off as floodwaters continue to push down from Queensland.