The Icelandic Met Office said lava flows were detected early this morning around Mount Sylingarfell, in a similar location to the eruption shortly before Christmas.
It said: “The eruptive fissure is approximately 3 km long. Lava flows mostly towards the west at the moment and the flow seems to be slightly less than at the start of the 18th of December eruption.”
It added lava fountains were reaching 50-80 metres with the volcanic plume rising about three kilometres.
The FCDO said seismic activity had affected the town of Grindavik and the area to the north of it plus the Blue Lagoon.
It advised: "All roads to Grindavik and the surrounding area are closed and you should stay away from this area. Keflavik International Airport and the road to it is unaffected and operating normally."
The advice concluded "The capital city, Reykjavik, and the rest of Iceland is not impacted by the eruptions," but warned: "It is likely there will be further eruptions in this location."
The Blue Lagoon thermal pools have been closed and evacuated as a precaution, although in a statement, it said: “The current eruption site is a safe distance from Blue Lagoon.”
It added all guests with bookings will be contacted.
Keflavik airport, Iceland’s main gateway, confirmed schedules operating as normal.
Icelandair said: “Volcanic activity in the southwest region of Iceland has no impact on our flights.” Yesterday, the carrier blamed reporting of seismic activity for a drop in passenger numbers to Iceland during January.
Birgir Olgeirsson, a spokesperson for rival Icelandic airline Play, added: “Our wonderful country of Iceland sits on top of a volcanic hot spot in the North Atlantic Ocean and boasts more than 30 active volcanoes which experience an eruption every four to five years on average.
"Iceland is a nation used to living with the extremes of nature and is no stranger to volcanic activity, with six eruptions having taken place on the Reykjanes Peninsula in the last five years there have been no disruptions to flights.
"As we, alongside the Icelandic Meteorological Office, closely monitor the situation, we’re confident our flight schedule will not experience any disruptions.”
