At least two people dead after powerful earthquake triggers tsunami in New Zealand

At least two people have died after a large 7.5 magnitude earthquake struck New Zealand - causing a small tsunami to hit the South Island's east coast.

The quake, northeast of the country's largest city Christchurch, hit just after midnight local time on Sunday, according to the US Geological Survey (USGS).

New Zealand Prime Minster, John Key, said the bill from the damage is expected to be at least "a couple of billion dollars".

Hours later, a 6.2 magnitude earthquake struck New Zealand's South Island.

The latest quake was recorded at 1.45pm on Monday, 75 miles northeast of Christchurch, the USGS said.

A breached dam on the Clarence River in Marlborough district has sent a wall of water downstream.

A Marlborough District Council statement said: "Residents are urgently advised to move to higher ground immediately".

Damaged shop windows after the 7.5 quake struck the South Island. Credit: AP

The earlier, more powerful earthquake, cut power and phone lines in many areas of the country. Roads were also blocked by landslips.

A small tsunami was also generated, with people on the South Island's east coast warned to seek higher ground.

New Zealand lies on the notorious Ring of Fire, the line of frequent quakes and volcanic eruptions that circles virtually the entire Pacific rim.

People evacuated from buildings check their mobile phones in Wellington. Credit: PA

One woman, whose house is on the South Island, told Radio NZ: "The whole house rolled like a serpent and some things smashed, the power went out".

English backpackers Phil and Jane Coles were sleeping in a hostel when the earthquake hit: "We're on the second floor and just felt the movement. My husband didn't actually wake up to start with. I think I said: 'Quake, wake up'.

"The quake was quite slow to start off with, then built up to quite a high one It was hard to walk across the room."

New Zealand's Civil Defence announced that a tsunami had been generated by the quake and said that waves could be up to five metres and continue for "several hours".

It urged an immediate evacuation of the area and issued safety advice to all those affected.

"The first waves have arrived but we know that it is too early to say what the impact has been," said Sarah Stuart-Black, national controller at the Ministry of Civil Defence.

"Our concern is what is coming. Future waves are coming that may bebigger than what has come before."

The extent of damage caused by the quake remains unclear.

Christchurch is still recovering from a 6.3 magnitude earthquake in 2011 which killed 185 people and caused widespread damage.