Floodwaters are once again threatening to inundate the NZ tourist hub of Queenstown as an overflowing Lake Wakatipu encroaches on the low-lying CBD.

Last week waterfront business owners were busy removing stock and sandbagging their premises as the rising lake reached its threshold level. However, by Saturday night the threat had eased somewhat as flows in the rivers that feed the lake slowed.

Central Queenstown is notoriously prone to flooding, with the last major flood in 1999 causing about $NZ60 million ($47 million) in damage.

Many local business owners lack insurance cover, as the high risk forces insurers to either refuse cover or impose policy limitations and large excess payments.

But Insurance Council of New Zealand CEO Chris Ryan says some cover is available “at a price”.

Some retailers in the flood-prone city centre have chosen to respond to the risk by rebuilding in a manner that allows minimal disruption to business.

“At present things are manageable,” he told insuranceNEWS.com.au.

Queenstown Lakes District Council Mayor Clive Geddes told Radio NZ the lake will be at a very high level for at least another few six days, with a risk that high winds might whip up waves.

Some businesses have reopened but motorists are being told to leave their vehicles outside the CBD.