A powerful 7.8-magnitude earthquake killed two people and caused ‘utter devastation’ in New Zealand on Monday, with wild weather hampering rescue efforts as darkness fell.

The tremor, one of the most powerful ever recorded in the quake-prone South Pacific nation, hit just after midnight near the South Island seaside tourist town of Kaikoura.

It triggered a tsunami alert that sent thousands of coastal residents fleeing for higher ground across much of the country.

Kaikoura, a town of about 2,000 people popular with international backpackers, was completely isolated, with telecommunications down and huge landslides cutting all access roads.

Civil Defence Minister Gerry Brownlee said rescuers had to travel in by helicopter to slowly build up a clear picture of the damage.

‘I think had there been serious injury or suspected further loss of life, then we would have heard about it by now,’ he told Radio New Zealand.

He added: ‘It looks as though it's the infrastructure that's the biggest problem, although I don't want to take away from the suffering... and terrible fright so many people have had.’

Brownlee and Prime Minister John Key flew over the affected area in a military helicopter.

‘It's just utter devastation... months of (repair) work,’ Key remarked as he surveyed the landslips that dumped hundreds of tonnes of rocky debris on the main highway.

Aerial footage outside Kaikoura showed railway tracks ripped up and tossed 10 metres (30 foot) by the force of the quake, while locals posted pictures of themselves near huge fissures that opened up in roads.

One person was believed to have died at a historic homestead that collapsed at the town, while police were trying to reach the scene of a fatality at a remote property north of Christchurch.

As hundreds of people prepared to spend the night in evacuation centres, rescue workers were facing deteriorating weather conditions.

Heavy rain increased the risk of more landslides and strong winds made clean-up work hazardous.

The treacherous conditions temporarily blocked the Clarence River with debris, which then shifted to release a ‘wall of water’ downstream and force more evacuations.

- Terrifying experience -

The earthquake struck at 12:02am Monday (1102 GMT Sunday) and was 23 kilometres deep, the US Geological Survey said.

It was felt across most of the country, causing severe shaking in the capital Wellington, about 250 kilometres (155 miles) away.

The quake ignited painful memories for residents in nearby Christchurch, which was devastated five years ago by a 6.3 tremor that killed 185 people.

Key said he was well aware its impact could have been much worse.

‘Purely on the Richter scale, this thing has been bigger than what we saw in the Christchurch quake, but thankfully the loss of life, at this point, is significantly less,’ he told Sky News.

Earthquake engineer Ken Elwood from the University of Auckland attributed the relative lack of fatalities to the quake striking at midnight and the fact it hit a sparsely populated rural area.

In contrast, the Christchurch quake hit at lunchtime directly under one of the country's biggest cities.

‘People were safe in their homes,’ Elwood told TVNZ.

‘Homes might get damaged but they're safer for the people inside and that's certainly the blessing of this earthquake.’

But for residents living through the tremor, particularly those who survived the Christchurch disaster, it was a terrifying experience.

‘It was massive and really long,’ Tamsin Edensor, a mother of two in the South Island city said.

‘We were asleep and woken to the house shaking, it kept going and going and felt like it was going to build up.’

Soon after the earthquake, tsunami warning sirens sounded, with police and emergency workers going door to door to evacuate seaside properties.

Civil Defence, responsible for emergency management in New Zealand, warned of a ‘destructive tsunami’ with waves of up to five metres (16 feet).

However, the largest waves were only about two metres before the alert was lifted.

Hundreds of aftershocks, some stronger than 6.0, continued to rattle the country in the hours after the main quake.

Among those given a scare were the touring Pakistan cricket team, who were staying in Nelson, about 200 kilometres from the quake centre.

‘Some of the boys were in prayer, some were watching the India-England Test on TV when we felt the windows shake,’ team manager Wasim Bari told ESPNcricinfo.

New Zealand is on the boundary of the Australian and Pacific tectonic plates, which form part of the so-called ‘Ring of Fire’, and experiences up to 15,000 tremors a year.