GRINDAVIK, Iceland, Nov 14 (Reuters) - Icelandic authorities were on Tuesday preparing to build defence walls around a geothermal power plant in the southwestern part of the country that they hope will protect it from lava flows amid concerns about an imminent volcanic eruption.
Seismic activity and underground lava flows intensified on the Reykjanes peninsula near the capital Reykjavik over the weekend, prompting authorities to evacuate nearly 4,000 people from the fishing town of Grindavik on Saturday.
The probability of an eruption remained high despite a decrease in seismic activity, the Icelandic Meteorological Institute said in a statement on Tuesday.
Nearly 800 earthquakes were recorded in the area between midnight and noon on Tuesday, fewer than the two previous days, it said.
"Less seismic activity typically precedes an eruption, because you have come so close to the surface that you cannot build up a lot of tension to trigger large earthquakes," said Rikke Pedersen, who heads the Nordic Volcanological Centre based in Reykjavik.
"It should never be taken as a sign that an outbreak is not on the way," she said.
Authorities said they were preparing to construct a large dyke designed to divert lava flows around the Svartsengi geothermal power plant, located just over 6 kilometres (4 miles) from Grindavik.
Justice Minister Gudrun Hafsteinsdottir told state broadcaster RUV that equipment and materials that could fill 20,000 trucks were being moved to the plant.
Construction of the protective dyke around the power station was awaiting formal approval from the government.
A spokesperson for HS Orka, operator of the power plant, said it supplies power to the entire country, although a disruption would not affect power supply to Reykjavik.
Almost all of Grindavik's 3,800 inhabitants were briefly allowed back to their homes on Monday and Tuesday to collect their belongings, Iceland's department of civil protection and emergency management said.
In Grindavik, long cracks ran through the town centre, leaving its main street impassable, while steam could be seen rising from the ground.
Some of the houses still had their lights on, but the town was deserted beyond the odd car and a handful of locals there to collect their most important belongings before Grindavik was once again declared out of bounds.
Local resident Kristin Maria Birgisdottir, who works for the town municipality, told Reuters on Tuesday she only had the clothes she had worn for work on the day the town was evacuated.
"I'm getting prepared in case I get a chance to visit my house and get some of my belongings," said Birgisdottir, who has moved to a summer house with her family.
Some residents had to be driven into Grindavik in emergency responders' vehicles, while most inhabitants were allowed to drive into Grindavik in their private cars accompanied by emergency personnel.
Most pets and farm animals had been rescued from Grindavik by Monday night, according to charity Dyrfinna.
During the afternoon, new metres installed near Grindavik by the meteorological office detected elevated levels of sulphur dioxide, leading Grindavik to again be fully evacuated at short notice slightly ahead of schedule.
The agency said in an update that while there were no other indications of an eruption starting, it could not be ruled out since the gas does not appear unless magma is high in the earth's crust.
