ABOUT 70 locals are being evacuated from their homes after a tornado-style storm dumped asbestos and other building materials on parks, backyards and streets in Kiama on the NSW south coast.
Gale-force winds uprooted trees, stripped roofs and wiped out buildings as the storm front hit in the early hours of Sunday morning.
"Seeing the roof of the fire station missing, seeing mature trees that look like they have been through a mixmaster, seeing blue tarpaulins along a defined corridor: this is an event that you associate with a tornado going through parts of America," said NSW Premier Barry O'Farrell.
"What is clear is that it cut a path, it followed a path across the land."
More than 170 homes suffered damage of some kind and the State Emergency Services (SES) believes at least 10 homes have been completely destroyed.
Power was yet to be restored to a number of homes on Monday afternoon as emergency volunteers scrambled to put tarpaulins on homes before more rain predicted in the coming days.
After observing the devastation from a helicopter, Mr O'Farrell said cabinet was working to declare it a natural disaster zone and he hoped assistance for homeowners, businesses and farmers would be unlocked within 24 hours.
He said the damage bill was unknown at this stage.
Kiama mayor Brian Petschler told AAP that about 70 people lived in the asbestos exclusion zone created by debris from the town's leisure centre and a number of houses, including one that "blew up" on the edge of town.
They were being evacuated on Monday and were expected to be allowed to return home in two days.
"They will have to stay out of there until the area has been cleared," Mr Petschler told AAP.
"We're very concerned and we've got major problems with the leisure centre, which is largely built of asbestos materials."
He said the leisure centre, a nearby carpark and a sports field had all been closed off, as well as a number of streets in the middle of town.
NSW SES Assistant Commissioner Tara McCarthy said the asbestos hadn't posed a problem while it was still wet, but there were now concerns the fibres could spread.
"Obviously we are seeing now the conditions are becoming sunnier ... and we are looking at a number of local evacuations," she told reporters.
"As soon as they commence the evacuations, then we will bring in teams to do the clean-up."
She said Kiama and the Sydney suburb of Malabar had copped the worst of the storm.
Mr Petschler said the storm hit hard and fast and it was miraculous no one had died.
"It's astounding really ... I was absolutely amazed at the ferocity of the storm," he said, adding doors and walls had been ripped off the local nursing home.
Only one woman needed treatment for an eye injury caused by flying glass.
Bruce Elder, who lives on one of Kiama's worst-hit streets, said he and his wife counted themselves "extremely lucky" after suffering only one broken window when their neighbour's balcony "decided to go for a wander".
"It was absolutely all the cliches: it started out sounding like a freight train," he told AAP.
"The best way to describe it is, take a really, really strong wind and then multiply it by 10 and you only start to get an idea of what it was like."
Late on Monday, Kiama was declared a natural disaster zone alongside 10 other areas of NSW.
In a joint statement from Prime Minister Julia Gillard and Mr O'Farrell, Kiama residents and businesses were promised help "to restore any damage caused by the severe storms and flooding and ease some of the associated burden".
A community meeting was held at the Kiama council chambers on Monday night to inform residents of what was being done about the asbestos contamination.
Emergency Operations Controller Superintendent Wayne Starling said 14 homes in Minnimurra St and two small blocks of units in Swan Place had asbestos issues.
He said those residents would be allowed to stay on Monday night but would be required to leave by 7am on Tuesday when asbestos removal would start.
"Our aim is not just to keep the community safe today but healthy in the future," Supt Starling said.
Police were patrolling the area on Monday night.
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