More than 400 people have died in an earthquake that devastated a Chinese village, officials said Tuesday, as relatives faced the stark probability that rescuers would only find the remains of their loved ones.

The death toll had risen to 410, authorities in the southwestern province of Yunnan said in a statement, as concerns mounted over a barrier lake formed by a landslide blocking a river in the disaster zone.

Some state media reports speculated that the swollen waters may burst within days, potentially flooding the downstream area.

The magnitude 6.1 tremor destroyed 80,000 houses and seriously damaged 124,000 more, wrecking the once-idyllic mountainside village of Longtoushan, where residents confronted their losses.

"My daughter and I have no hope for the future," said farmer Lan Helian, 32, whose husband was crushed by a collapsing building.

"He should have been outside in the field, he only returned for a few minutes," she said, holding her brow and staring at the floor.

"We have no money and I don't know what we are going to do."

Li Shanyan, 35, watched anxiously as emergency personnel dug through the debris of her home, searching for her 71-year-old aunt.

"We could still hear her yesterday morning," said Li. "(The rescuers) dug for a whole day and couldn't find her."

Like many in poverty-stricken Longtoushan, the crudely-made house is built from yellow earth, with a tiled roof.

"It was flattened, all flattened," she said. "We couldn't salvage anything -- all was buried in there. Everything is reduced to ruins.

"It's just like Wenchuan in 2008," she added, referring to the huge earthquake in neighbouring Sichuan province that killed more than 80,000 people, China's deadliest quake since 1950.

Moments later, she sobbed as rescuers dug out her aunt's lifeless body from under the wreckage.

- Widespread devastation -

More than 18,000 rescuers were deployed in Yunnan, where Premier Li Keqiang was overseeing the rescue effort, state-run media reported.

In one dramatic scene, an 88-year-old woman was pulled from a pile of rubble late Tuesday after being buried for more than 50 hours, state-media said.

"The aged person's health is fine and uninjured, though is weak and suffering from low blood sugar due to a lack of food," the Yunnan Information Daily cited medical staff as saying.

"With each life saved, there will be one more happy family," Li told soldiers, according to the state-run China Daily newspaper.

Relatives of the dead will receive 20,000 yuan ($3,200) in compensation, state media said.

Longtoushan, the epicentre of Sunday's quake, has a population of more than 50,000, and nearly every building in a 600-metre hillside swathe of the township was almost entirely demolished by the quake.

Many of the more modern buildings in the centre of Longtoushan appeared to be less severely damaged, but brick and old-style wooden houses were seriously affected.

Scores of workers assembled a red metal bridge across a river which cuts through the heart of the valley township.

Engineers set off huge explosions to dislodge boulders and rocks perched precariously over the narrow, winding roads that snake through the mountains.

- 'Too sad to eat' -

China's state broadcaster CCTV raised the ominous possibility of a further disaster in Ludian county, which includes Longtoushan, where a landslide had blocked a river.

With heavy rains falling the lake which had formed behind the barrier could burst within days, endangering at least 800 people, the broadcaster said. Other reports said there was a power station downstream.

A local official surnamed Lu told AFP that people in villages close to the lake had already been evacuated.

The China Earthquake Administration pointed to the area's population density and fragile building materials as contributing to the quake's destruction.

"Most rural houses were made of brick or wood, were not designed to be resistant to quakes, and many of them were outdated," it said, according to the official Xinhua news agency.

A landslide on a nearby mountain two weeks ago has also hampered the relief effort, residents said, leaving a small bridge the only connection between Longtoushan and the outside world.

"Water in the wells is all tainted with mud," said Li Shanyan. "The government distributes a little (food and water), which we give to old people and children first."

Each adult has about a half a bottle of water each day, she added.

"I feel too sad to eat, though there is not much to eat anyway."