Vast Chile volcano ash cloud partially collapses

PUERTO MONTT, Chile (Reuters) - A towering cloud of hot ash, gas and molten rock spewed miles into the air by a volcano in southern Chile has partially collapsed, raising fears it could smother surrounding villages, an expert said on Tuesday.

Luis Lara, a scientist with the government's geology and mining agency, said the column of ash, which had soared as high as 20 miles, was now about 4.5 miles.

The column of debris, kept aloft by the pressure of constant eruptions, could collapse entirely, smothering the ghost town of Chaiten 6 miles away with hot gas, ash and molten rocks.

"These small collapses which generate minor flows of pyroclastic material are normal, they are not that serious in that they affect a small area, the top part of the volcano," Lara said.

"But that doesn't make the worst case scenario disappear," he said. "As long as the eruptive column is high in the air, (a major collapse) is a possibility."

Thousands of people have been evacuated from within a 30-mile radius of Chaiten volcano, 760 miles south of the capital Santiago.

Chaiten began erupting on May 2 for the first time in thousands of years. The ash has turned turquoise lakes and fjords a dirty gray in the southern region of Patagonia -- home to majestic peaks, log cabins and adventure tourism -- and has coated animal fodder and vegetation.

Satellite images show a white stripe smeared across the southern part of South America, much of the ash carried into neighboring Argentina, where some towns have also been submerged in ash.

The government said on Tuesday it would pay out the equivalent of between $1,200 and $2,200 per month per family that has been left homeless by the volcano.

"The government will not allow anybody to be abandoned here," said chief government spokesman Francisco Vidal.

Thick ash has caked rooftops, settled on the backs of animals and also formed a sediment in a river near Chaiten, which overran its banks briefly on Monday due to heavy rains and flooded about 40 houses on the outskirts of Chaiten town.

Footage from the area showed a cluster of wooden houses at tilted angles in a river of gray ash.

President Michelle Bachelet's government was due on Tuesday to unveil a package of aid measures for around 7,000 evacuees, some of whom are staying in makeshift shelters set up in schools in the southern town of Puerto Montt.

Many are staying with family and friends but have lost their livelihoods for now, with no inkling of when or if they will be able to return to Chaiten.

Chile's chain of volcanoes, the second-largest in the world after Indonesia, includes some 2,000, and 500 of those are potentially active.

(Writing by Simon Gardner; Editing by Cynthia Osterman)