More than 20 towns in Queensland have been cut off or flooded, with more than 200,000 people affected.
Military aircraft are flying supplies into Rockhampton, which has been isolated by the still-rising waters.
The authorities have now confirmed three deaths caused by flood waters in the past few days.
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At the scene
image of Nick Bryant Nick Bryant BBC News, Rockhampton
From here the city of Rockhampton looks like a small island surrounded by an inland sea.
We're still 36 hours away from the peak of the floodwaters but they have been closing in on the central business district faster than originally anticipated.
People are being ordered by police to leave their homes. They have been wading through these outlying suburbs, chest-deep at times, to tell people to leave. Many are reluctant to do so.
There have been reports of small-scale looting and many people are worried not just by the floodwaters but by the possibility their homes might be robbed by looters. That is why an evacuation centre which has room for 1,500 people had only 50 overnight.
Ms Bligh has recalled ministers from holidays for crisis talks to plan the response to the flooding.
"Given the scale and size of this disaster, and the prospect that we will see waters sitting potentially for a couple of weeks, we will continue to have major issues to deal with throughout January," she said.
Her concern was echoed earlier by Australian Prime Minister Julia Gillard, saying: "This is a major natural disaster and recovery will take a significant amount of time.
"The extent of flooding being experienced by Queensland is unprecedented and requires a national and united response."
The comments come as the city of Rockhampton became cut off by waters spilling from the still-swelling Fitzroy River, leading many of its inhabitants to flee.
"Rockhampton is now completely stranded - a town of 75,000 people - no airport, rail or road," Ms Bligh told ABC radio late on Monday.
With the last route into Rockhampton cut, three Australian Defence Force helicopters will provide the city's only lifeline for food and medical supplies.
"The worst [is] still to come in communities like Rockhampton. Supplying them with food, ensuring that we keep them safe during this flood is absolutely critical," Ms Bligh said.
The water level in the Fitzroy River is expected to peak at 9.4m late on Tuesday or early Wednesday.
Rockhampton Mayor Brad Carter said about 40% of the city could be affected, and residents may have to wait at least two weeks before being able to return home.
'Stocking up'
One Rockhampton resident told the BBC that she had stocked up on fuel and food at petrol stations as she drove back early from holiday.
"We are going to stay in, we are fully prepared, have plenty of food and have been boiling the water - but if the water gets higher than 9.4m we will have to turn the power off and might have to leave," said Trudi Reed.
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Alex Finlayson who lives in Emerald, Queensland, filmed inside his flooded home
"The water is coming very quickly and we are watching it rise."
Another resident said there had been panic-buying in the city.
"Lots of people have been stocking up on fuel. I also heard about one woman who brought 20 loaves of bread from a supermarket," resident Petros Khalesirad told the BBC.
The intense rains have also had an impact on two of the country's principal exports - wheat and coal.
The Queensland premier said 75% of operations at the states coal fields had been halted, which supply half of the world's coking coal needed in steel manufacturing.
As much as half of the country's wheat crop - some 10 million tonnes - have been downgraded to less than milling quality due to the flood damage, Reuters reports. The country is the world's fourth largest exporter of the crop.
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QUEENSLAND
* North-eastern Australian state
* Largely tropical climate
* Area: 1.73 million sq km (668,000 sq mile)
* Coastal regions, including Great Barrier Reef, designated World Heritage Site
* Mining and cattle ranching important inland
Prime Minister Gillard has announced that grants and low-interest loans would be made available to help local businesses recover from the flooding.
On Monday, two more deaths from the flooding were confirmed.
One was a 38-year-old man whose boat was swamped near the mouth of the Boyne River, and the other was a woman whose car was washed off the road west of Emerald.
On Sunday, another woman swept from the road while trying to cross the Leichhardt River became the first confirmed death since the flooding was declared a disaster.
Forecasters cancelled a severe storm warning on Monday, saying the immediate threat had passed.