Nearly fifty thousand people on Indonesia's resort island of Bali have sought refuge in temporary shelters, as fears grow that Mount Agung could erupt for the first time in half a century.

Officials denied false news circulating online that the volcano had erupted, saying photos on social media were from previous volcanic eruptions.

But authorities on Friday raised the alert for Mount Agung to the highest level, indicating an eruption is imminent.

Budi Hartini, an official at an emergency post in Karangasem district, where the volcano is located, said 49,300 people living near the volcano had been sheltered in makeshift camps in 10 localities.

"There are still villagers who are staying put and we are persuading them to evacuate," Hartini said.

The 3,031-metre Mount Agung last erupted for almost a year in 1963 to 1964, killing about 1,200 people.