Tropical Cyclone Larry hit land near Innisfail in the far north of Queensland state as a top category five, but had since been downgraded to a category four, the Queensland weather bureau said.

It is the strongest cyclone to strike Australia in more than 30 years and was seen as potentially more dangerous than Cyclone Tracy, which devastated the northern city of Darwin in 1974, killing 71 people and leaving 20,000 homeless.

Innisfail police said they had been inundated with calls from terrified residents whose "homes are literally crumbling around them".

"We have roofs flying off in Fly Fish Point, Silkwood and in the city centre," an Innisfail police spokeswoman said. "And we have trees across roads."

Police had been unable to leave the station despite hundreds of calls for help, she said.

"We've had reports of some casualties at Cairns hospital, some 20 or so," weather bureau forecaster Jonty Hall said. "There's also some reports of a few people missing as well."

Queensland state Premier Peter Beattie declared a state of emergency ahead of the storm's landfall late Sunday, opening the way for mandatory evacuations in several coastal areas, where tidal surges of up to two metres (6.6 feet) were expected.

Hundreds of people evacuated coastal towns in the area and major airlines cancelled all flights into Cairns and Townsville, the two biggest cities in the region.

The weather bureau describes a category five cyclone as "extremely dangerous with widespread destruction". It said Larry posed a very serious threat to life and property.

Forecaster Jonty Hall said conditions around Innisfail were "extremely dangerous".

"We're starting to see a very dangerous storm surge come to shore anywhere pretty south of Innisfail down towards Cardwell," he said. "It doesn't get much worse than this."

Local officials said on national radio that Larry's winds had knocked out power in some areas and was toppling trees.

Amanda Fitzpatrick, owner of the Barrier Reef Motel outside Innisfail, told ABC radio under the eye of the storm: "It was so terrifying, we were all crying.

"It's just like a bomb has gone off, like something went through and just bombed it."

Innisfail resident Wayne said: "Whatever trees aren't uprooted have snapped off or have no leaves on them. It's just unbelievable."

Garage roller doors had been "shredded, just shredded. It's really scary stuff".

Innisfail resident Des Hensler said the cyclone was the most frightening storm he had seen in the 35 to 40 years he had lived in far north Queensland.

He said he was sheltering alone in a church with water up to his ankles, "just standing in a place where I'm not going to get killed".

"A tree has just fallen on a house (and there's a) street light actually touching the ground, that's how strong the wind is," he told Seven Network television.

Reflecting the rough and tough attitude of many residents of Australia's tropical far north, he added: "It's just frightening. I don't get scared much but this is something to make any man tremble in his boots.

"There's a grey sheet of water, horizontal to the ground, and just taking everything in its path.

"And believe me, it's taking everything ... it is totally scary."

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