By Charlotte Greenfield and Greg Stutchbury
WELLINGTON (Reuters) - A powerful 7.8 magnitude earthquake pummeled central New Zealand early on Monday, killing at least two people, damaging roads and buildings and setting off hundreds of strong aftershocks.
Emergency response teams flew by helicopter to the region at the epicenter of the tremor, which struck just after midnight some 91 km (57 miles) northeast of Christchurch in the South Island, amid reports of injuries and collapsed buildings.
"It's just utter devastation, I just don't know ... that's months of work," New Zealand Prime Minister John Key told Civil Defence Minister Gerry Brownlee after flying over the coastal town of Kaikoura, according to Brownlee's Twitter account.
He described landslips in the area as "just horrendous". In a statement seen by Reuters, Key said of the likely damage bill: "You’ve got to believe it’s in the billions of dollars to resolve."
Powerlines and telecommunications were down, with huge cracks in roads, land slips and other damage to infrastructure making it hard to reach the worst-affected areas.
A tsunami warning that led to mass evacuations after the original quake was downgraded after large swells hit New Zealand's capital Wellington, in the North Island, and Christchurch.
Wellington was a virtual ghost town with workers ordered to stay away while the city council assessed the risk to buildings, several of which were damaged by the tremor. There were concerns that loose glass and masonry could be dislodged by severe weather hitting the capital, with 140 km per hour (85 mph) winds forecast.
Hundreds of aftershocks, the strongest a 6.2 quake at about 1.45 p.m. local time (0045 GMT), rattled the South Pacific country, fraying nerves in an area where memories of a deadly 2011 quake are still fresh.
Christchurch, the largest city on New Zealand's ruggedly beautiful South Island, is still recovering from the 6.3 quake in 2011 that killed 185 people.
New Zealand's Civil Defence declared a state of emergency for the Kaikoura region, centered on a tourist town about 150 km (90 miles) northeast of Christchurch, soon after Monday's large aftershock.
Kaikoura, a popular spot for whale watching, appeared to have borne the brunt of the quake.
"Our immediate priority is ensuring delivery of clean water, food and other essentials to the residents of Kaikoura and the estimated 1,000 tourists in the town," Brownlee said.
The Navy's multi-role vessel HMNZS Canterbury was heading to the area, he said.
Urban Search and Rescue (USAR) said a 20-person rescue team and two sniffer dogs had arrived in the town. A second team was on standby in Christchurch, USAR said in a statement.
Police in the area around Christchurch reported 19 burglaries of homes and commercial properties after the quake as residents headed for higher ground.
"It is extremely disappointing that at a time when people are facing such a traumatic event and communities are coming together to support one another, there are others who are only interested in taking advantage,” Canterbury District Commander Superintendent John Price said in a statement.
Hours after the quake, officials said a slip dam caused by the quakes that had blocked the Clarence River north of the town had breached, sending a wall of water downstream.
A group of kayakers missing on the river was later reported safe.
New Zealand's Geonet measured Monday's first quake at magnitude 7.5, while the U.S. Geological Survey put it at 7.8. The quakes and aftershocks rattled buildings and woke residents across the country, hundreds of kilometers from the epicenter.
Geonet said four faults had ruptured, with one at the coast appearing to have slipped as much as 10 meters (33 feet).
Government research unit GNS Science said the overnight tremor appeared to have been two simultaneous quakes which together lasted more than two minutes.
New Zealand lies in the seismically active "Ring of Fire", a 40,000 km arc of volcanoes and oceanic trenches that partly encircles the Pacific Ocean. Around 90 percent of the world's earthquakes occur within this region.
Stock exchange operator NZX Ltd said markets traded normally, although many offices in the capital were closed. The New Zealand dollar initially fell to a one-month low before mostly recovering.
Fonterra, the world's biggest dairy exporter, said some its farms were without power and would likely have to dump milk.
Prime Minister Key postponed a trip to Argentina, where he had planned to hold a series of trade meetings ahead of the Asia-Pacific Economic Cooperation (APEC) leaders' summit in Peru this week, as he met disaster officials.
At least one of those killed was found in a house in Kaikoura that "collapsed like a stack of cards", Kaikoura Hospital's Dr Christopher Henry told Fairfax media. Two other people were pulled alive from the same building.
New Zealand media reported one of the pilots taking rescuers to the area was Richie McCaw, the recently retired captain of New Zealand's world champion All Blacks rugby team.
"At one point, the railway was way out over the sea - it had been pushed out by (land) slips. It would not have been a nice place to be at midnight last night," McCaw told the New Zealand Herald after helping fly the USAR team to Kaikoura.
(Additional reporting by Greg Stutchbury in WELLINGTON, Jamie Freed, Wayne Cole and Jane Wardell in SYDNEY; Writing by Paul Tait; Editing by Lincoln Feast)