(Updates with looters, quotes, more colour)

By Michael Perry

SYDNEY, June 12 (Reuters) - Australians mopping up flood-damaged homes north of Sydney on Tuesday faced disease from sewage-contaminated floodwaters, while around 1,000 people remained cut off by flooded rivers, said officials.

A coal ship beached near the port of Newcastle with 700 tonnes of fuel and oil still threatened a marine disaster, said officials. A salvage team worked to refloat the stricken vessel.

The damage bill from the three-day storm, which battered Australia's east coast and killed nine people, stood at around A$200 million ($165 million) and was expected to rise, said the Insurance Council of Australia.

"The Hunter Valley is an inland sea. There is a lot of destruction," said New South Wales (NSW) state premier Morris Iemma as he toured the flood-hit area north of Sydney.

Up to 60 sewage pumping stations in the Hunter Valley and 40 on the Central Coast were without power after the storm.

"People should treat all floodwater as if it is contaminated," State Emergency Services (SES) spokeswoman Kim Palmer told local radio. "They should wash extremely thoroughly after they come in contact with floodwater."

Health authorities fear outbreaks of gastro-intestinal illness as thousands of Australians begin repairing their homes, after the worst flooding in the Hunter Valley for 30 years.

Many farms remained submerged by floodwaters, which may take days to recede, and helicopters were carrying out food drops.

Emergency crews also used boats to reach stranded residents with food supplies, while some people rowed boats or paddled kayaks ferrying goods between houses.

"We've got 1,000 people isolated up and down the valley," said SES spokesman Steve Delaney. "We're still looking at several days before the flood waters recede for a lot of these communities to be even open to the rest of the world again."

"The flooding isn't a real issue at the moment. It's just going to be the massive clean-up operations," he said.

STORES LOOTED

But as some shopkeepers returned to their flooded stores they found they had been looted, with thousands of dollars worth of goods such as televisions and Ipods stolen.

"To think that anyone out there wants to steal someone's car or worse, just makes me sick," said premier Iemma.

Farmers said they would struggle to find feed for livestock rescued from flooded farms, but once waters receded farmers who were battling drought would be able to plant crops and re-stock.

There was good news from the famed Hunter Valley vineyards, where winemakers said they had been spared major damage.

"We have been going through drought. A week ago we were seriously planning how to get through next summer without water," said Bruce Tyrrell, head of Tyrrell's Wines.

"Today all the creeks have been flushed and water is overflowing. We have been pruning for the past three weeks, so it's perfect timing," Tyrrell told local radio.

"Out in this area there has not been significant damage."

Some 30,000 homes in New South Wales were still without power as a result of the storm. Electricity officials said it would take a week for some to be reconnected in areas where power lines and poles had been destroyed.

Despite the torrential downpour, Sydney's main catchment area received very little rain, with just 40 mm falling in the city's main Warragamba Dam.

The wild seas that beached the bulk carrier "Pasha Bulker" on Friday had eased and a salvage crew planned to refloat the stricken ship, possibly on Wednesday.

Authorities still fear a marine disaster if the giant ship breaks up and spills its fuel and oil. The salvage team has discovered a hole in the external hull of the ship, but believe a second internal hull has not been pierced.

"There is an environmental disaster waiting to happen," said NSW premier Iemma. "There is still a danger there. We have to proceed with caution."

Loading operations at Newcastle, one of Australia's main coal export ports, resumed on Tuesday after being stopped due to rough seas, leaving 50-plus empty coal ships offshore awaiting cargo.

($1=A$1.21)

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