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Prime Minister John Key has completed a flyover of Christchurch and headed into a meeting with mayor Bob Parker and Civil Defence officials.
He is being accompanied by local MPs Gerry Brownlee and David Carter, and Civil Defence Minister John Carter.
Mr Key said he was visiting in "solidarity" with the people of Christchurch and to assess the damage caused by this morning's 7.1 earthquake for himself.
Mr Key commended the local response and said it was a sad day for the South Island.
He first heard about the disaster moments after it happened when his sister sent him a text message.
The first few lines of the text would not pass broadcasting standards, he said.
The city was left devastated after the quake struck 30km west of the city at 4.35am this morning.
It was centred at a depth of 10-12km, near Darfield.
Buildings crumbled throughout Christchurch and in rural Canterbury, crushing cars and closing roads, yet only one serious injury was reported, a man in his 50s who is in intensive care in Christchurch Hospital.
A second man suffered serious cuts, and many had cuts, scratches and broken limbs.
A state of emergency has been declared in Christchurch and the Selwyn district, giving Civil Defence personnel more powers.
Water, sewage the main concern
Sewage and water concerns are among the top priorities for emergency services.
Water and sewage pipes are burst, with Mayor Bob Parker saying the city may resort to taking water from the Avon River.
He says the water and sewage system is not operating. Power is also out in large parts of the city.
Ninety per cent of power was expected to be restored by this evening, but water and sewerage systems would take longer to get back in order.
Christchurch Airport was closed until 1.30pm, and trains were not running.
Burwood Hospital in Christchurch is among many homes and services without water.
Plans are in place to get milk tankers full of water into the city but the water was likely to be rationed and people must conserve it.
Residents have been asked not to flush toilets and boil any water before drinking.
'Blessing no one died' - Civil Defence Minister
It is a blessing no one died in the massive earthquake which rocked Canterbury this morning, Civil Defence Minister John Carter said after crisis meetings in the Beehive.
"I think we've been extremely lucky as a nation that there's been no fatalities," he told NZPA after top public servants, ministers and specialists met in the wake of the quake. "We're blessed, actually."
Mr Carter said the damage to infrastructure was so significant that it was difficult to assess. However, early estimates put it at $2 billion.
Earthquake Commission and insurance specialists were flying to Christchurch to survey the damage and would report back in 48 hours.
Mayor reacts to record quake
Mr Parker said he was thankful there has been no loss of life but there had been considerable damage across the city and outlying areas.
He said he did not want to overstate the level of damage "but I think it's like an iceberg. There is, in a sense, below the visible line significant structural damage."
"There would not be a house or a family in our city that has not in some way had damage done to their person and or their property," Mr Parker said.
"Our thoughts are with our people.
"We know that a lot of people will be very nervous, deeply disturbed."
Scientists have described this morning's earthquake as the most significant since the 1931 magnitude 7.8 Hawkes Bay earthquake.
Mr Parker said the inner city was being closed down and asked residents not to go "rubbernecking", and check on their neighbours.
Mr Parker said the worst problems seem to be centred in the city's eastern suburbs and rural areas in outlying Christchurch.
State of emergency
Civil Defence declared a state of emergency around 10am this morning.
New Brighton and other seaside areas are bracing for possible evacuation.
Prime Minister John Key has travelled to the area.
Christchurch Hospital inundated
Christchurch Hospital said two men have been seriously injured by the earthquake.
One man in his 50s is in a serious condition in intensive care at Christchurch Hospital after a chimney collapsed on him.
Another man, also in his 50s, was seriously injured by falling glass.
The main Christchurch Hospital is being inundated by residents arriving with broken limbs, bruises and cuts.
A spokeswoman, Michelle Hider, asked residents with minor injuries to go to 24-hour surgeries for treatment rather than the hospital.
Christchurch Airport reopens
Christchurch Airport has reopened. Travellers are advised to check with their airline about scheduled flights.
Residents desperate for emergency supplies
Panicked residents have been queuing to buy water as uncertainty surrounds the stricken city's water supply.
But many businesses are unable to open their doors as the massive cleanup gets underway.
Nigel Bond, owner of the New World on Colombo Mall says he could barely see the floor of the supermarket this morning for stock, much of it now unusable. His staff have been working to clean up damaged stock since 5.30am.
"Unfortunately our big water shelf has collapsed and most of that stock has been lost," he told nzherald.co.nz.
"There's a bit of structural damage, like cracks in the floor and fallen ceiling tiles. Nearly everything's on the floor. Red wine, olive oil, you name it - it's not pretty."
Buildings, roads devastated across Christchurch
Street surfaces have risen up into a peak in the middle of a Christchurch road, while craters in the road have filled with water from ruptured mains. People in vehicles are trying to avoid them.
Among the affected streets are Hills Rd in Shirley and others in the suburb of St Albans and New Brighton.
In other areas roads have been blocked by debris after several buildings collapsed onto the streets, leaving their interiors visible and the central city resembling a war zone.
Large groups of onlookers have gathered to survey the damage and take pictures with their cameras and mobile phones.
Several large aftershocks have already struck the region, and wardens dressed in high-visibility gear are asking people to stay well clear of buildings because of the high risk of further collapses.
The city centre is now officially closed.
Traffic lights are still not working in several places around the central city, creating gridlock as the traffic flow increases.
Mayor ask residents to conserve water
Mayor Bob Parker has asked residents to conserve water.
Mr Parker has warned residents not to flush the toilet and to conserve water. There are fears the sewerage system has been damaged.
Engineers have been checking the city's priority infrastructure.
Mr Parker urged Cantabrians affected by the earthquake to check on their neighbours to ensure they were safe.
Personal accounts: Residents 'lucky to be alive'
Marsha Witehira, 30, was rescued by friend Tama Wharepapa, who literally pulled her to safety by her feet as a wall in her bedroom collapsed around her.
"It just missed my head," Ms Witehira said. "I'm very lucky to be alive. If Tama wasn't here to wake me from my sleep and pull me out, I really wouldn't like to think what the result would be."
Knee Doherty was asleep in her central Christchurch home when the building next door collapsed.
"We didn't even notice the movement as much as the noise," she said. "The back of the house is pretty much gone. All the house next door is gone. It was just a massive noise."
'A scary sight to see'
New Zealand Herald reporter Jarrod Booker,who lives in the central Christchurch suburb of Linwood, said he was woken by "extremely violent shaking."
He said the chimney from his next door neighbour's house had fallen and smashed through a car's windscreen.
"There have been a number of aftershocks of a much lesser degree since then."
Mr Booker's partner, Kineta Knight, said it was a scary sight to see.
"The scariest thing was the quake just felt like it would never end. It wasn't a sharp, sudden jolt. It was like being on a rollercoaster.
"Things were smashing everywhere, we could hear glass breaking."
Newstalk ZB reporter Craig Kerr spoke to Auckland host Pat Brittenden from the Christchurch office, which he said had sustained damage.
"Basically, the place is destroyed. Desks that were standing up are flattened against the ground. The filing cabinets are tipped over. The lifts in the building are obviously out of action."
"The building just along the road from us here has been flattened - it's on the ground," he said.
A Timaru resident told NZPA he was awakened by the shaking. His house was groaning and a bedside lamp crashed off its table.
Bad weather forecast
Weary Canterbury residents struggling to cope with this morning's devastating earthquake will also have to cope with a storm, forecasters say.
WeatherWatch.co.nz said strong winds would increase during the day, with severe gales gusting to 130kmh possible later in the day.
MetService is also watching the storm, issuing a severe gale warning for the city predicting winds averaging 65kmh (gale force) with gusts to 130kmh.
"Winds of that speed can be damaging and with many buildings extensively damaged it could cause a major headache for emergency services," a spokesman said.
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- NZ HERALD STAFF / NZPA