Australia's Prime Minister Julia Gillard on Wednesday warned "unprecedented" flooding would worsen after entire towns were cut off and soldiers airlifted hundreds of people from northeastern towns.

Drenching rains unleashed by a tropical cyclone have left vast tracts of the state of Queensland under water, with 1,000 evacuations and 38 regions declared natural disaster areas.

Gillard launched a public appeal for relief funds, pledging one million dollars (one million US) of government money to help those hit by the "particularly devastating" deluge.

"Some communities are seeing floodwaters higher than they've seen in decades, and for some communities floodwaters have never reached these levels before (in) the time that we have been recording floods," Gillard told reporters.

"For many communities we haven't even seen the peak of the floodwaters yet, that's a number of days away."

Hundreds fled their homes in the coastal city of Bundaberg, north of Brisbane, and in nearby Emerald, while the inundated town of Theodore was completely emptied by soldiers with Black Hawk helicopters.

The area resembled a vast inland sea, with crops and farmland worth billions of dollars drowned by the downpour, said local MP Vaughan Johnson.

"I flew over the area from Alpha to Barcaldine in a helicopter yesterday and I've never seen water laying in that country (area) like it is now -- never," Johnson told ABC radio.

"It's like a delta system draining, and you've got to see it to believe it."

Some people were left homeless after the surge and were camping in evacuation centres with little more than the clothes on their backs, while others took refuge in mining camps or with family and friends.

"We've got nowhere to go, we've got no family here," said Bundaberg man Daniel Bell, whose home was completely swamped. "You feel powerless. Absolutely powerless. All you can do is pray."

Floodwaters are expected to peak Friday at Emerald, with authorities warning the disaster will exceed major floods there in early 2008 that forced 2,700 evacuations and left a damage bill in excess of 50 million dollars.

Residents of the town of Rockhampton may be forcibly evacuated later this week as the flooding spreads and there is further rain, potentially closing the city's airport and all inbound roads and railways, said mayor Brad Carter.

Rockhampton's river is forecast to sit near flood levels for as long as 10 days, putting about 400 homes at risk.

The town of Dalby, to the southwest, may run out of drinking water within two days following damage to its water treatment plant, and local authorities are considering trucking in supplies.

Economists have estimated that the flooding could cost the economy as much as seven billion dollars in agricultural losses and delays to coal shipments.

Gillard, who is on a Christmas break, said she would tour affected areas in the coming days.