An eruption by Iceland's most active volcano put Europe on high alert on Monday as a billowing ash cloud drifted towards Scotland and threatened to shut down airports across the northern edge of the continent.

Northern Europe's fringe was affected first, though experts saw little chance of a repeat of last year's six-day travel chaos caused by the eruption of another Icelandic volcano.

People living next to the glacier where the Grimsvotn volcano burst into life on Saturday were most affected, with ash shutting out the daylight and smothering buildings and vehicles.

An Icelandic Met Official said ash from the volcano could touch northwest Scotland as early as Monday evening.

Europe's air traffic control organisation has said that if volcanic emissions continued at the same rate then the cloud might reach west French airspace and north Spain on Thursday.

Authorities have backed more relaxed rules on flying through ash after being criticised for being too strict last time.

Then, closing European air space forced the cancellation of 100,000 flights, disrupted 10 million passengers and cost the industry an estimated $1.7 billion in lost revenues.

"I think the regulators are a bit more sensible than they were last year," Michael O'Leary, chief of budget airline Ryanair, told a conference call. "We would be cautiously optimistic that they won't balls it up again this year."

Nevertheless, airline shares fell between 3 to 5 percent.

German Transport Minister Peter Ramsauer said he did not expect the eruption to disrupt air traffic to the same degree as last year, adding however there would be a flight ban for jet planes should particles from the ash cloud reach a higher concentration than 2 milligrammes per cubic meter.

Speaking to Sky News, British Transport Secretary Philip Hammond said authorities could hopefully work with airlines to "enable them to fly around concentrations of ash rather than having to impose a blanket closure".

Grimsvotn erupted on Saturday, with dark plumes of smoke shooting as high as 20 km (12 miles) into the sky.

The outburst is the volcano's most powerful since 1873 and stronger than the volcano which caused trouble last year, but scientists say the type of ash being spat out is less easily dispersed and winds have so far been more favourable.

"The difference in impact on aviation comes down to three factors: the ash being produced by the eruption, the weather patterns blowing the ash around, and new rules about planes flying into ash," University of Edinburgh volcanologist John Stevenson wrote on his blog.

SMOTHERED IN ASH

But some were expecting problems. "It's too early to tell if Europe will be affected. What's certain is that when it is affected, there will be flight cancellations," French Transport Minister Thierry Marianai told Europe 1radio.

Europe's air traffic control organisation, which set up a crisis unit after bad coordination was blamed for worsening last year's crisis, said no closures outside Iceland were expected on Monday or Tuesday.

Airlines as far away as Australia were monitoring the cloud. Norway's civil aviation body said the one or two flights a day to the Arctic archipelago of Svalbard would shut tonight. A small part of Greenland's eastern airspace was also closed.

Iceland's aviation authority said however it hoped it might be able to re-open the island's main airport by the evening as the tower of smoke above the volcano appeared to have fallen.

The Icelandic met office said the plume from Grimsvotn, which last exploded in 2004, had fallen to just below 10 km (6 miles), well below its maximum so far of 25 km.

The volcano lies under the Vatnajokull glacier in southeast Iceland, the largest glacier in Europe. People living in districts close by have been smothered in ash.

"Yesterday between 2 and 3 (pm in the afternoon) it brightened up a bit until 8 in the evening, then it became black again," said Sigurlaugur Gislasson, 23, whose family owns a hotel near the town of Kirkjubaejarklaustur.