The volcanic island of La Palma, which belongs to Spain, was declared a disaster area on Tuesday.
At the same time, the government in Madrid provided 10.5 million euros (12.3 million dollars) in emergency aid for those affected on the Canary island, state television station RTVE reported.
This was to finance 107 flats and the most urgent expenses of the people whose houses were destroyed by the lava.
So far, nearly 600 buildings have been burned and flattened by the blazing hot mass. The number of evacuees dropped slightly to 5,600 after some residents were allowed back into their homes.
According to estimates by the regional government, the damage amounts to several hundred million euros.
Meanwhile, the lava, which has a temperature of around 1,000 degrees Celsuis, continued to move towards the sea, destroying banana plantations and large greenhouses near the coast. The plastic tarpaulins and artificial fertilizer stored there caught fire, as could be seen on TV pictures.
As toxic fumes were released, some people had to be evacuated from nearby houses, the newspaper La Vanguardia reported.
Only a few hundred metres were left before the lava flow would pour into the sea on the steep coast. Since toxic gases laced with hydrochloric acid can also form when the lava comes into contact with the salty seawater, a curfew was maintained for four nearby districts with a total of about 300 inhabitants. People were told to keep windows and doors closed.
Air traffic with the island was still suspended. The only alternative was ferries to the larger neighbouring island of Tenerife. However, long waiting times were reported.
The volcano in the Cumbre Vieja mountain range in the south of the island off the west coast of Africa had erupted on September 19 for the first time in 50 years. Even volcanologists could not say how long it would remain active. It could take weeks or even months.