Swollen rivers peaked overnight, allowing clean-up operations to begin and evacuated residents to return to the northern New South Wales towns of Grafton and Kempsey, the State Emergency Service (SES) said.

But SES spokesman Greg Slater said up to 20,000 people in small communities remained cut off by the floodwaters, which have led to disaster declarations in NSW and neighbouring Queensland.

"We're concentrating our efforts on those communities in terms of resupply and provision of immediate medical assistance and medical supplies, also just the basic necessities, foodstuff and the like," he told Sky News.

Two people have died in the floods, which dumped one-third of southeast Queensland's average annual rainfall in just 24 hours.

NSW Premier Nathan Rees flew over the affected area Sunday and said it was difficult to grasp the extent of the floods, even from the air.

"It's an inland sea, and you see the (animal) stocks that are isolated and the towns that are isolated and you wonder where it's all going to go," he told reporters.

Rees appointed former police commissioner Ken Maroney to coordinate clean-up in the northern NSW region, which has been hit by three major floods since February.

"This will be a large-scale recovery effort to help restore the region," he said.

Clarence Valley mayor Richie Williamson said flood mitigation measures in most major towns withstood the rising waters overnight.

"Things are starting to get back to normal thankfully," he said.

"Last night it was touch and go as the peak arrived at Maclean. Thankfully the levee wasn't overtopped there. Things are also okay in Yamba as well, albeit very, very wet."

Floods unleashed by cyclonic rains in February saw much of Queensland declared a disaster area, with more than one million square kilometres (385,000 square miles) deluged and 3,000 homes damaged.

Further floods hammered the region last month, washing a number of motorists to their death and claiming the life of a 12-year-old girl who was swimming in a swollen weir.

The floods follow a once-in-a-century heatwave in southeastern Australia, in which more than 2,000 homes were razed by major wildfires and 173 people died.

Meteorologists have warned the extreme temperatures and downpours -- a common feature of Australian summers -- would only increase as a result of climate change.

earlier related report
Australia declares flooding disaster in second state
A second Australian state was declared a disaster zone Friday, with almost 15,000 homes evacuated as wild winds tore roofs from houses and flood waters cut off entire towns.

Severe storms lashed the coast of the southeastern state of New South Wales during the night, felling trees and power lines, isolating thousands of homes and forcing mass evacuations.

The extreme weather killed one man earlier this week when a freak gust flung a sheet of metal though an office window in Queensland state, which declared the storm a natural disaster late Wednesday.

Prime Minister Kevin Rudd said the government stood ready to assist in any way, while the disaster declarations have freed emergency funds for devastated businesses, farmers and residents.

Authorities ordered more than 5,000 homes to be evacuated in the town of Lismore in New South Wales, emergency officials said, with widespread flooding isolating much of the area and cutting off communities further south.

"One old fellow early this morning was saying that he's never seen the river come up so fast," Lisa Gava, manager of the Lismore evacuation centre, told state radio.

Almost 10,000 people have been ordered to leave their homes in the nearby town of Grafton, which was expected to be hit with heavy flooding late Friday, the State Emergency Service (SES) said.

"Power supplies will need to be shut down. Telephone services will fail, which means people will not be able to call for help," SES spokesman Dave Mackey told ABC radio.

"Sewerage facilities will fail with raw sewage possibly entering houses. Roads will become flooded and vehicle movement will be restricted."

Heavy rains and gale-force winds were forecast to continue into Saturday, the weather bureau said.

"Destructive wind gusts exceeding 125 kilometres an hour (77 miles an hour) are possible along the coastal fringe during Friday," the bureau said.

Large waves were also pounding the coast, the bureau said, with extremely dangerous surf conditions likely to persist for up to a week.

Queensland's premier Anna Bligh said Thursday the damage bill from this week's deluge was likely to be among the highest the state had ever seen, with flooding at its worst since 1974.

Floods unleashed by cyclonic rains in February saw much of Queensland declared a disaster area, with more than one million square kilometres (385,000 square miles) deluged and 3,000 homes damaged.

Further floods hammered the region last month, washing a number of motorists to their death and claiming the life of a 12-year-old girl who was swimming in a swollen weir.

Bligh this week declared Queensland's long-standing drought officially over for the southeast of the state, with the deluge boosting water levels.

But rural lobby group Agforce said the big dry, which has gripped parts of Australia for a decade, was far from over for some farmers.

The floods follow a once-in-a-century heatwave in southeastern Australia, in which more than 2,000 homes were razed by major wildfires and 173 people died.

Meteorologists have warned the extreme temperatures and downpours -- a common feature of Australian summers -- would only increase as a result of climate change.

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