The battle is on to save the Icelandic town of Grindavik as lava torched three homes creating a “worst case scenario”.

A volcano on the Reykjanes peninsula erupted in the early hours of Sunday, spewing semi-molten rock towards the settlement in south-western Iceland for the second time in less than a month.

At least three homes have been set on fire in Grindavik as lava flowed into the town and the main road into the area has been cut off.

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The eruption follows a series of earthquakes near the fishing town, the Icelandic Meteorological Office has said.

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