Residents and authorities remained on high alert overnight ahead of a damage assessment this morning after rising rivers across Southland and Otago inundated low-lying homes, businesses and farms.

A state of emergency remains in force in Southland and dozens of roads across both provinces remain closed by floodwaters, including State Highway 1 between Dunedin and Invercargill.

The Mataura River was the main concern yesterday as it peaked at 2500cumecs at Gore at 10am, spilling over into the surrounding area.

More than 2400 people evacuated from their homes in Gore were able to start returning home last night, but those living in Wyndham and closer to the coast remained out of their homes overnight; that included a group of 18 rest-home residents who were flown to Southland Hospital by helicopter.

Police, fire, council staff and volunteers worked together with Emergency Management Southland to manage and co-ordinate the evacuations.

Emergency Management Southland controller Angus McKay said last night although the situation in Gore was looking ''really positive'', the Mataura River was still running at close to peak level at Mataura and while there had been no significant breach yet, it was a case of ''watch and wait''.

Mataura residents stayed at evacuation centres last night. The situation would be reassessed as soon as possible.

Civil Defence authorities and Rural Communities Minister Damien O'Connor declared the flooding to be a medium scale adverse event, opening the way for extra support to be offered to farmers and growers, and $100,000 was made available through Rural Support Trusts to speed up recovery and provide technical advice.

O'Connor, who had flown over the affected areas, said the response to the flooding event had been ''absolutely amazing''.

''It seems as though everything is under control ... but clearly we are going to have to wait and see when the water goes down the extent of the damage.''

The $100,000 was initial funding and more money might be available as the full extent of the damage to farms was revealed over the coming days, he said.

Southland Mayor Gary Tong praised the response by Civil Defence authorities and also singled out the emergency response in Milford, where more than 300 visitors had been stuck after the Milford Rd was significantly damaged by the flooding, as ''fantastic''.

''The extensiveness of the damage in there is mind-boggling. It's a wonder we did not lose a life in there.''

To get the last 195 visitors out of there yesterday had been a good effort, he said.

Yesterday, the Southern DHB set up an emergency operations centre and the NZDF sent a helicopter, two Unimog trucks and soldiers to assess damage and assist in evacuations in eastern Southland.

Residents in low-lying areas of Balclutha had been warned about lunch-time to be ready to evacuate over concerns a breach in a floodbank could flood much of the town, although Mayor Bryan Cadogan said the situation had stabilised by 5.30pm.

Convoys were organised yesterday to allow travel out of Te Anau from the Five Rivers junction (the intersection of State Highways 6 and 97) through to Frankton on the closed section of SH6, where the highways to the north were open.

The convoys operated on the hour from 4pm until 8pm, when the route closed again.

More convoys have been organised for this morning at 7am, 8am and 9am.

NZTA journey manager Peter Brown said the highway between Frankton and Five Rivers/Lumsden was closed by slips and there were rockfall concerns, which was why traffic had to be managed in convoy.

It was aiming to have the route open again this afternoon.

Access to Invercargill from Te Anau or Queenstown was not available last night due to the Makarewa River levels closing two key bridges.

Two freight trains were halted in their tracks by the flooding in the Gore area on Monday night.

A Kiwirail spokesman said the trains had been secured and would be moved after the track had been inspected and any necessary repairs had been carried out. The continuing high water levels meant inspections had not yet started.

Evacuations reportedly went smoothly, except for two Southland residents being arrested for failing to comply with police instructions.

Mataura pensioner Chris Couzens was reported as saying he was handcuffed by police and escorted away for refusing to evacuate and leave his animals behind.

He said he and his wife were taken to the Mataura police station.

A police spokesperson did not confirm details about the incident, but said two people were arrested in relation to failing to comply with police instructions.

''We are currently speaking with them.''