He said because the 6.8 magnitude earthquake was centred close to shore, south east of the city, there was no tsunami warning system. Panicked people rushed onto the streets of Giborne when the 8.55pm quake hit and hundreds then took to higher ground.
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However the GNS Science tsunami panel said there was no evidence a monster wave had been generated.
A Ministry of Civil Defence spokesman, Vince Cholewa, said he could confirm three buildings had collapsed.
"As far as we are aware, there are no injuries in those building, in the CBD," he said.
"Most of the damage is utilities – gas, water and electricity.
"We've got intermittent landline and cellphone contact."
At least two roofs had collapsed with a parapet crashing through the roof of the Hallensteins Building in the main street. Police evacuated the central business district, which was cordoned off.
There were also unconfirmed reports of people trapped in a lift.
A large hole appeared in Ormond Road, a major city artery.
There were also some minor fires reported.
The earthquake, which was more powerful than the 1987 Edgecumbe earthquake, was centred 50 kilometres south of Gisborne at a depth of 40 kilometres. People at Gisborne said it arrived with an "enormous roar".
The Edgecumbe quake was much shallower than tonight's quake.
Police and fire services were struggled to cope with damage in downtown Gisborne.
The National Crisis Centre has been activated in Wellington to monitor the situation. A state of emergency has not been declared.
A spokeswoman for Gisborne Hospital said no patients have presented with injuries as yet but the hospital's water tanks had been affected.
"The water tanks on the hillside and on the roof have been damaged. We have a some leakage problem but we are sorting that now.
"No patients have been hurt and everything at the hospital has been running well."
Mr Shepherd said:"There's obviously a lot of safety issues, a lot of apprehension around families involved in this".
"We're trying to secure the CBD and the shops and ascertain if there's any people injured in the buildings," he said.
Gisborne District Council spokesman Vance Walker said there had been no loss of life.
"We're currently in the situation of trying to ascertain what damage has been done," he said.
Mr Walker appealed for people to stay where they were.
"There is considerable traffic moving about and that is causing somewhat of a problem in terms of emergency services and repairs services having to move around within the city and other communities.
Mr Walker said he was fairly confident that the emergency services were responding well.
"We're trying to get a big picture on what has happened, we're trying to determine what immediate repairs we have to undertake and then from there we'll be formulating a recovery approach to the situation."
He described the quake as a series of sharp shocks, followed by a lull then more shocks.
"There's been some minor damage in Gisborne and we would possibly expect similar levels of damage in Wairoa, Napier and Mahia," said GNS Science duty seismologist Warwick Smith. "It's been felt very widely".
Stuff.co.nz readers report the earthquake was felt strongly in in Wellington, Blenheim and Nelson and tremors were reported further down the South Island including Christchurch, Dunedin and Hokitika on the west coast.
Dennis Munro of Kohitane Farm near Wairoa reported extensive damage to his farmhouse, including a toppled chimney, cracks in the walls and a collapsed kitchen ceiling.
No one in the house was injured, but all were shocked, Mr Munro said. His family were not staying at the house tonight because of the extent of the damage.
The house was a "real mess" and even christmas gifts were destroyed, he said.
National MP Craig Foss, who lives at Waimarama on the Hawke's Bay coast said his "whole house seemed to rock for ages.
"Our youngest, five years old, was woken by the quake and noise and we all stood under an internal door frame. I am sure the lights dimmed just before the quake hit. It seemed to go on for a long time.
"There was a lot of creaking and groaning. Our home seemed to take a long time to settle down and stop moving."
A Napier reader reported their phones went down temporarily and glasses fell out of their cabinets.
Callan Attwell of the Capital and Coast District Health Board said in an email: "Everyone in theatre in the Wellington hospital felt it."
Alarms were set off in Lower Hutt by the quake, Hutt resident Amanda Botha said.
Murray McPhail, who has a property at Makauri, about 10km from Gisborne city, said he could see waves in his swimming pool as the quake shook.
"You could just about surf on it," McPhail said.
"Stuff come out of cupboards, bottles fell off walls, ornaments fell.
"It was pretty violent. It was certainly a decent shake."
McPhail, who involved in equestrian sport, has a barn and stables at his property but said it had escaped damage.
"We haven't suffered any serious or irreparable damage.
The earthquake was also strongly felt in the Eastern Bay of Plenty.
- With NZPA