Mount Agung has been hurling clouds of white and dark grey ash about 10,000ft into the atmosphere since the weekend and lava is welling up in the crater, sometimes reflected as a reddish-yellow glow in the ash plumes.
Its explosions can be heard seven to eight miles away.
Videos released by the National Disaster Mitigation Agency showed a mudflow of volcanic debris and water known as a lahar moving down the volcano’s slopes.
It said lahars could increase because it is rainy season and warned people to stay away from rivers.
The agency raised the volcano’s alert to the highest level early yesterday and expanded the danger zone to six miles in places.
It said a larger eruption is possible.
The volcano’s last major eruption in 1963 killed about 1,100 people.
Spokesman Sutopo Purwo Nugroho told a news conference in Jakarta that the extension of the danger zone affects 22 villages and about 90,000 to 100,000 people.
He said about 40,000 people had left the area but others feel safe or do not want to abandon their livestock.
“Authorities will comb the area to persuade them,” he said.
“If needed we will forcibly evacuate them.”
About 25,000 people were already living in evacuation centres after an increase in tremors from the mountain in September sparked an evacuation.
Lava rising in the crater “will certainly spill over to the slopes”, Mr Sutopo said.
Bali’s airport was closed early yesterday after ash, which can pose a threat to aircraft, reached its air space.
Flight information boards showed rows of cancellations as tourists arrived at the busy airport expecting to catch flights home. Airport spokesman Air Ahsanurrohim said 445 flights had been cancelled, stranding about 59,000 travellers.
The closure was in effect until this morning, although officials said the situation would be reviewed every six hours.
It had a ripple effect across Indonesia, causing delays at other airports because Bali’s I Gusti Ngurah Rai airport is a national hub with many connecting flights.
Bali is Indonesia’s top tourist destination, with its gentle Hindu culture, surf beaches and lush green interior attracting about five million visitors a year.
Indonesia’s Directorate General of Land Transportation said 100 buses were being deployed to Bali’s international airport and to ferry terminals to help stranded travellers.
The agency said major ferry crossing points had been advised to prepare for a surge in the number of passengers and vehicles.
Stranded tourists could leave Bali by taking a ferry to Java and then travelling by land to the nearest airports.
Ash has settled on villages and resorts around the volcano and disrupted daily life outside the immediate danger zone.
Indonesia sits on the Pacific “Ring of Fire” and has more than 120 active volcanoes.