Iceland has abruptly shut one of its most popular attractions after an alarming “seismic swarm” that raised fears of a possible volcanic eruption.

Guests were hurried out of the Blue Lagoon geothermal spa in the middle of Thursday night (local time) after they were rattled awake shortly before 1am by a magnitude 4.8 quake.

It was the strongest to hit the region since the recent wave of seismic activity began on October 25.

“There was a panic situation,” local taxi driver Bjarni Stefansson told The Associated Press.

“People thought a volcanic eruption was about to happen.”

Stefansson said he arrived at the Retreat Hotel to find a chaotic scene, with lava rocks strewn across the road and the car park jammed with up to 30 taxis.

The middle-of-the-night jolt at Blue Lagoon came after more than 20,000 tremors detected by the Icelandic Met Office since late October, including 1400 in the 24 hours to midday on Thursday.

The BBC reported the wave of seismic activity was concentrated in Iceland’s south-western Reykjanes Peninsula, which was dormant for 800 years before a 2021 eruption.

The peninsula gets about 700,000 visitors every year.

Tweet from @LavaCentre

The IMO has said magma (molten rock) is accumulating at a depth of about five kilometres north-west of Thorbjorn mountain. It said Thursday’s quake was centred in the Fagradalsfjall volcanic area, about 30 kilometres from the capital Reykjavik.

“Presently, there are no signs that earthquake activity is becoming shallower,” the IMO said on its website.

“However, the situation could change quickly, and it is not possible to exclude a scenario involving a lava-producing eruption in the area northwest of Thorbjorn.”

The Blue Lagoon, which is famed for its 100-degree turquoise-coloured baths, can be seen easily from Thorbjorn. Its owners have temporarily closed the resort, because of concerns for the welfare of staff and guests.

“Blue Lagoon has proactively chosen to temporarily suspend operations for one week, despite the authorities not raising the current level of uncertainty during this period of seismic activity,” they posted on their website.

The Icelandic Civil Protection Agency has sent Ingibjorg Lilja Omarsdottir to the nearby fishing town of Grindavik, in case of any potential evacuation. She told the BBC there was no imminent need for evacuation but local authorities were preparing, in case “magma [appeared] to rise to the surface”.

Omarsdottir said Grindavik residents would have about “a day and a half” notice if an eruption was imminent.

Grindavík’s 3400 residents have endured a rush of seismic episodes since the Reykjanes Peninsula began to rumble three years ago. But Thursday’s quakes were stronger.

Retired beautician Hildur Gunnarsdóttir, 68, told The Associated Press she spent the night driving around in her car to “get a break from feeling the earthquakes”. She also has a phone app called My Earthquake Alerts.

“I turned off notifications days ago,” she said.

“The phone was vibrating constantly.”

Omarsdottir said there was no risk of another massive explosion comparable to the eruption of Eyjafjallajokull in 2010, which shut down northern European airspace for days.