The death toll from Hurricane Katrina was expected to soar above 100 as more bodies washed up in US gulf coast cities yesterday in one of the worst natural disasters America has faced in decades, write Jamie Wilson in Baton Rouge and Julian Borger in Washington
President Bush will cut short his holiday and return to Washington today to oversee recovery efforts in a region overwhelmed by floodwaters that have sent tens of thousands fleeing and left millions without power.
Up to 80 people were killed in one county in Mississippi which took the brunt of the storm. An official in the town of Biloxi said the death count would be in the hundreds.
In New Orleans, those who survived the initial impact of the hurricane faced new dangers yesterday as its dykes gave way under the pressure of the storm surge.
Some people smashed holes in their roofs to escape the rising waters. Others were reported to be trapped in their attics across a city that is 70 per cent below sea-level.
There were no official estimates of casualties, but officials were thought to be preparing for the possibility of hundreds of fatalities and many thousands injured.
The situation was dire for as many as 30,000 people evacuated to a sports stadium in New Orleans, with foul sanitary conditions and reports of a man committing suicide by throwing himself from an upper tier.
The impact was quickly felt farther afield. Oil prices surged to record highs above $70 a barrel as the market quailed at the prospect of supply disruptions in the Mexican Gulf.
Insurers were flinching at a clear-up cost estimated at $26 billion (€21.14 billion) which would make Hurricane Katrina the most expensive disaster in US history.
"Right now, our priority is on saving lives, and we are still in the midst of search and rescue operations," Mr Bush said. "We know that many are anxious to return to their homes. It is not possible at this moment."
Many homes in New Orleans were submerged by the surge of floodwater brought on by the storm. The mayor of New Orleans, Ray Nagin, said bodies were floating in high waters that covered most of the city.
"The city of New Orleans is in a state of devastation," he said on local television.
"We probably have 80 per cent of our city under water, with some sections of our city the water is as deep as 6 metres (20ft). We still have many of our residents on roofs. Both airports are under water."
In Biloxi, on the Mississippi Gulf coast, 30 people were killed when a beachside block of flats collapsed. One of Biloxi's casinos, the mainstay of the local economy, was cut in two.
"This is our tsunami," AJ Holloway, the city's mayor, told the local newspaper, the Sun-Herald.
The Mississippi governor, Haley Barbour, said the death toll in Biloxi and the surrounding coastline in Harrison county was between 50 and 80. Rigorous evacuation procedures meant the human cost was unlikely to top Hurricane Camille in 1969, which took 256 lives, let alone the Galveston storm of 1900, which killed more than 6,000 people, the worst natural disaster in US history.
However, Hurricane Katrina could well become the most expensive storm the US has ever had to clean up, as it laid waste to much of the recent development along the gulf coast.
The region's oil production accounts for a fifth of the nation's needs.
Two offshore oil rigs broke free from their moorings and one hit a bridge in Mobile, Alabama.
The hurricane was downgraded to a tropical storm as it moved north into Tennessee and Kentucky but it continued to wreak havoc, spawning at least seven tornadoes in its wake, and emptying heavy rain into the Mississippi.
The flooding river was certain to worsen the problems in the Mississippi Delta and in New Orleans, where experts said that the longer historic buildings stood in floodwater, the worse would be the inevitable structural damage.