Earthquakes shook a church bell in Grindavik like a “warning from God”, a resident has said.

“The earthquakes went on for hours getting worse and worse, the church bells were ringing so loudly it was like a warning from God,” Erling Snær told The Independent.

“We’ve had a lot of news in this town but I hope this time people are looking into it, and will make changes because it is so hard to leave your home.

“It’s hard to think about tourists coming to look at the crack today. But for now I don’t think they will. It’s all so soon. I still believe that something will erupt.”

A Grindavik resident has told how she tried to have a look at the craters but was blocked by workers.

Margaret Eyjolfsdottir, 55, walked her normally skittish whippet Lady on their normal route and seemed reassured in the setting sun, declaring emphatically: “We are going nowhere, this is our home.

“ I wanted to go over and see the damage but they wouldn’t let me near. I think she [points to Lady] understands that it is all over. She is calm and so am I.”

The crater in Grindavik will become Iceland’s number one “selfie spot”, a volunteer rescue worker has predicted.

“I think it will definitely become the number one selfie spot in Iceland,” he told The Independent.

“If you put up a fish and chip store right there it will do so well. The English will love it there. It is an amazing thing that nobody was injured.

“Everyone is doing differently, some people are really angry others are really happy their homes aren’t damaged.”

A seismologist has said the decision on whether to return residents to Grindavik is an incredibly “difficult” one that he would not like to be making himself.

“The decision to move back is going to be a very difficult one and I don’t want to make it,” professor Páll Einarsson told The Independent

“Every day now brings a new situation. The last eruption was 1214 since then none until 2021 which is 800 years of slumber.”

He added: “We may now be at the beginning of an active volcanic period for the next two or three centuries.”

The risk of a volcanic eruption threatening Grindavik has subsided but has not completely disappeared, a seismologist has said.

“This dyke looks like it could solidify underground and not make it to the surface and that is the most favourable option for the people living there,” Professor Páll Einarsson, who was brought out of retirement to study the thousands of earthquakes rocking the town, told The Independent.

“But the worst case scenario is the magma-filled crack reaches the surface in the middle of the town between the houses of Grindavík. If that eruption continues for the same time it will be wiped out.

“We have to keep in mind this is not just one dyke that is scaring people right now - it is a new chapter of a long story. We’ve had three eruptions already this story is not going to end with this dyke.”

Grindavik can make something “positive” out of the recent earthquake, Iceland’s tourism department has said, suggesting some of the damage to infrastructure could be turned into a tourist attraction.

“When we have destruction from the eruption in the Westman Islands 50 years ago they kept some of the ruins intact,” Snorri Valsson, Iceland’s spokesperson for tourism, told The Independent.

“So most of the damages were repaired but there were sights in town where you could see the actual destruction, houses half covered under lava and ash. So I can imagine they will keep a couple of sights where you could see the actual crack in the ground if it is feasible. It will become an outdoor example, fascinating to see.”

He added: “It has done some damage but I’m sure the people of Grindavík can bring something positive out of it.

“The people have shown incredible resilience you can see that it has had an effect on them. It’s a tight-knit community that’s going to stick together and get back on their feet again.

“As you can see, travel in there is safe so everyone is welcome.”

Grindavik has seen an uptick in tourists after being hit by an earthquake that caused huge craters, a tourism chief has said.

“Grindavík is the quintessential fishing town that has been Iceland’s backbone throughout the centuries,” Snorri Valsson, Iceland’s spokesperson for tourism, told The Independent. “It has an excellent museum already on the tradition of salted fish making, for example.”

He added: “But I see an increase in tourists coming certainly since the earthquake because the infrastructure will be repaired and there’s a history of the events of recent days.

“I could imagine it could be a focus point of the visitor’s centre for years to come because of these events and the effect it had on town life. For Iceland’s economy, it is extremely important Grindavík gets back to normal it has impacted the decisions of the central bank already.”

Residents of Grindavik were given unrestricted access to return to their homes on Thursday after being evacuated.

Some returned to collect jet-skis, cuddly toys and other valuables, Barney Davis reports from the small fishing town.

Others, however, were apparently not prepared to take any risks despite the decreasing chances of an eruption and stayed away.

Icelandic authorities said on Friday they were still on alert for a volcanic eruption in the southwest Reykjanes peninsula, although the odds were falling after a drop in seismic activity.

Iceland has been living with a high risk of an eruption since seismic activity and underground lava flows increased in the region near the capital Reykjavik in late October.

The Metrological Office said in a statement that an eruption in or near the evacuated town of Grindavik was now seen as less likely and that volcanic magma is most likely to rise in the area between Hagafell and Sýlingarfell.

"Seismic activity continues to decrease," it said, adding that "the likelihood of eruption decreases over time".

Five ministers from the Icelandic parliament visited Grindavik on Friday, where evacuated residents have been allowed back since Thursday to pick up more personal belongings.

But it will be months before they all are able to move back to Grindavik due to infrastructure damage, Icelandic media RUV quoted public safety director Vidir Reynisson as saying.

As a result of a decrease in activity since the start of the week, the risk level related to earthquakes in Grindavik was lowered from emergency to danger level on Thursday, Iceland's civil defence authority said in a statement.