Emergency crews are racing to save a damaged reservoir, as "terrified" residents fear their Derbyshire town could be flooded.
Police say the wall holding back the 300-million-gallon Toddbrook Reservoir could still fail despite about 24 hours of efforts to shore it up.
Part of the dam wall collapsed on Thursday afternoon.
The 1,500 people evacuated from Whaley Bridge amid "mortal danger" warnings will not be allowed home tonight.
But the water level has dropped by half a metre thanks to ten fire service pumps moving 4.2 million litres of water every hour - with more pumps on the way.
An RAF helicopter is also halfway through dropping 400 tonnes of aggregate on the collapsed section.
How dangerous is it?
Police, the Environment Agency, and the Canal and River Trust have all said there is a "real risk" the dam could collapse.
Julie Sharman, from the Canal and Rivers Trust, said it was "a critical situation" but added the weather had improved and the water levels had reduced by 20cm.
"We aren't putting a figure on any risk of collapse but everything that can be done is being done," she said.
Engineers are attempting to get the reservoir's water level down, to reduce pressure on the wall and allow repairs to begin.
What does it mean for residents?
About 1,500 people left their homes after police told them to pack up their medication and pets and gather at an evacuation point.
Some stayed with relatives while others bedded down in pubs and hotels, with lots of businesses offering free rooms.
Police said residents would not be allowed back on Friday so would spend a second night away from their homes.
Bev Goodwin lives in Chapel-en-le-Frith and put up her mum and dad, Joy and Steve and two friends - Susie and Angela.
Joy said: "We have nothing. No clothes, no toothbrush, nothing.
"We have been thinking about what's in our house that we would miss - all our kids' pictures and of our grandchildren - it's upsetting."
Susie said: "It's just surreal that it's happening in our town, it's just bizarre."
Mike Breslin described it as a "crazy situation".
"They should never have built a school and a social club at the bottom of a dam. It's madness," he said.
Eric Baker, who has lived in the town for 30 years said: "It's shocking really, it's like living next to a ticking bomb. If that goes the devastation will be unimaginable.
"We saw the water coming over at a tremendous rate on Wednesday and the park was flooded but it wasn't until Thursday the people who look after it started to look worried.
"Then it started to collapse on Thursday and it made a tremendous noise as the concrete slabs began to collapse.
"The disruption is huge, the small shops and businesses are really being hit and of course we don't know when it will be over."
Another resident, who did not want to be named, said: "We just fled. I managed to take my nightdress and we've got the tortoise in the washing up bowl in the car.
"It's quite terrifying. If the dam goes, it will take out the whole town."
When will it be fixed?
Nigel Carson, who lives near the dam, said he had been told it would take two or three days to reduce the reservoir to a safe level if it does not rain.
There are no weather warnings in place for Friday, and the Met Office has said it expects much drier conditions.
BBC reporter Richard Stead described the operation to fix the dam as "a two-pronged attack".
He said: "The Chinook is bringing aggregate on the one hand to shore up the dam, but also to divert water further up the valley away from the reservoir.
"There are also 16 high-volume pumps being used to relieve the pressure on the dam.
"Only when that is done can work start on permanent repairs and finding out what went wrong."
Prime Minister Boris Johnson has asked the Environment Secretary Theresa Villiers to chair an emergency meeting.
My thoughts are with those who have had to leave their homes and all of those who are affected in #WhaleyBridge. First responders, engineers and RAF crews are working around the clock to fix the dam.— Boris Johnson (@BorisJohnson) August 2, 2019
Ms Villiers said she was receiving regular updates on the situation and the government's COBR committee would make sure everything possible was being done to help.
People have shared their admiration for the emergency services on social media, with Twitter user @nmstoker naming the chinook pilots #DamUnbusters.
By David Shukman, BBC science editor
This isn't the first time communities have faced the nightmare of a dam that could collapse.
Back in 2007 a dam near Rotherham was the cause of a major alert, and the scenario is very similar to now. Torrential rain had filled the Ulley reservoir to overflowing.
Cracks appeared in the dam itself. People downstream were told to leave. The M1 motorway was in the path of a potential burst so part of it was closed.
As with the dam at Whaley Bridge, the one at Ulley was built in the 19th Century with the same combination of clay and mud.
In the end, pumps relieved the pressure and nearly 3000 tonnes of rock strengthened the structure so the emergency passed.
But over the following three years a huge repair operation costing £3.8m was needed. And a major review of the 2007 floods was highly critical of the way many of Britain's dams are monitored.
Whatever happens at Whaley Bridge, questions will be asked about safety and whether ageing infrastructure can cope with the heavier downpours predicted as the climate warms.
Part of the reservoir's spillway broke away on Thursday.
It was damaged after large swathes of the country were battered by heavy rain and floods earlier in the week.
Police told residents in Whaley Bridge to gather at Chapel High School in neighbouring Chapel-en-le-Frith.
They were told to take pets and medication with them as it was unclear how long it would take to repair the damaged wall.
Pumps from fire services across the country have been pumping out 7,000 litres of water a minute.
Army engineers are clearing trees and bushes to get "five or six" more water pumps in on south side of reservoir.
Derbyshire Fire & Rescue Service said more than 150 firefighters from across the UK have been supporting the work at the dam and in the town.
A severe flood warning, which means a threat to life, has been issued for the River Goyt below the reservoir.