Nervous wait for flood zones as tropical cyclone looms

However, local communities face an anxious wait after being warned tropical cyclone Narelle in the Coral Sea looks set to make landfall as early as Friday.

Cyclone watches are in place for the far north Queensland coast between Lockhart River and Port Douglas, with widespread flood watches also issued.

Robert Urbaniak from the Bureau of Meteorology told AAP destructive wind gusts could hit the cape on Thursday from Lockhart River to Cooktown, with heavy rainfall across the region down to Port Douglas and Cairns.

The system is expected to reform over the Gulf of Carpentaria and make landfall again in the NT later in the week as a category three system.

That could unleash gusts of up to 224km/h, with winds averaging up to 159km/h - strong enough to cause significant damage to structures, crops and trees.

Katherine residents in the NT have been told they may have to batten down the hatches again as they recover from their worst flood event in almost 30 years.

NT Police Commissioner Martin Dole warned residents "we are not out of the woods yet".

"We don't know exactly where it's going to land, so we're putting everything that we can in place to be able to respond effectively if that cyclone does end up forming and impacting the Northern Territory," he said on Tuesday.

NT minister Jo Hersey helped launch a $100 million recovery fund on Tuesday, becoming emotional as she spoke about her constituents in flood-hit Katherine.

It has been her hometown for 36 years, with the recent deluge sparking the third flood she has endured.

"It's actually quite overwhelming for someone that's lived through three floods and had your house go under three times," she said.

She is fearful of a cyclone direct hit on Katherine just as it comes back online.

Chief Minister Lia Finocchiaro said the $100 million fund would focus on rebuilding damaged roads, bridges and flood mitigation works such as levees, along with other critical infrastructure.

"We want to make sure we get people's lives back to functioning as soon as possible," she said.

Police early on Tuesday rescued two people whose four-wheel-drive was swept into floodwaters near Alice Springs, one person found on the roof of the vehicle and the other clinging to a tree.

Police also rescued a 45-year-old man after he attempted to walk across a flooded bridge near Beswick on Monday.

He was swept downstream and clung to a tree before being rescued by boat.

Fifty troops will help Katherine's recovery over the next 10 days after the chief minister asked the federal government for Australian Defence Force assistance.

Fourteen low-risk prisoners will also assist the clean-up along with emergency services from Victoria.

Further northwest, flooding at the Daly River community reached roof height after water levels peaked at 16.42m - eclipsing a 1998 record.

Almost 600 people from the flooded communities of Daly River and Palumpa are still in emergency shelters in Darwin and Mataranka.

In Queensland's far north, Mossman Gorge and Daintree Forest were inundated for a third consecutive weekend.

Douglas Shire Mayor Lisa Scomazzon said her community was still recovering from a tropical low and work was under way to get the Daintree ferry back operating, when flooding hit again.

"Road crews have been working tirelessly to keep key routes open," she said.