Police and soldiers have cleared the last remaining people from the shadow of a Chilean volcano after a strong explosion spewed glowing-hot rocks from its crater.

The week-old eruption at the Chaiten volcano has scattered ash across a wide swath of South America, closing regional airports and driving more than 7,000 people from their homes. Vulcanologist Luis Lara warned things could get worse.

"The worst that could happen is that the seismic activity begins to increase, the explosions become greater and large domes form that could collapse and produce pyroclastic flows," said Lara, an expert at the government's Geological and Mining Service.

Pyroclastic flows are blasts of volcanic material that can move at great speed, destroying everything in their path.

Armed with a court order for people to leave an area within a 30-mile radius of the mountain, authorities forcibly removed about 130 hold-outs, mostly small farmers, who had refused to abandon their livestock.

Defence Minister Jose Goni said the government had requested the court order "because the danger is clear, as the volcano remains very active".

On Thursday, Argentina's weather service said volcanic ash had reached the capital of Buenos Aires and was turning the sky "a greyish colour," but not coating the ground. Such conditions were expected to persist there and in several southern provinces.

Two Argentine airlines, Austral and Aerolineas Argentinas, cancelled flights in half a dozen cities as drifting ash and smoke obscured visibility.

Chile's government said it has earmarked some 10.6 million US dollars (£5.3 million) in initial disaster funds to help victims in the coming month.

Officials are also helping to move hundreds of head of livestock from the disaster zone, and promise to compensate farmers for animals that are killed.