The hurricane has stalled near the islands of St Maarten and St Barthelemey, where it is "wreaking havoc", according to the US National Weather Centre.

Lt General Dennis Richardson of St Maarten said the island was "in a very dangerous situation".

Lenny is the fifth major hurricane of the season

The storm's winds, which peaked at speeds of 240kph, dropped to 167kph as it passed over the island, but it is still causing considerable damage.

Sea surges have swamped half of the capital of Philipsburg and powerful waves have pounded the main port.

A local radio reporter said the storm was "flinging shipping containers about like toys".

The US National Weather Service in Miami said Hurricane Lenny was expected to move slowly towards the north-east later on Friday. It said the core of the storm would continue to affect the islands of Dutch St Maarten, French St Martin, St Barthelemey and Anguilla.

Relentless rain has left hundreds of people homeless

Torrential downpours on Anguilla have flooded the phone company headquarters and officials have warned the island might lose phone communications, as others already have.

The storm's wind speeds are predicted to weaken further but Lenny remains a dangerous category two storm.

A hurricane warning remains in effect for French St Martin, Dutch St Maarten, St Barthelemey, Anguilla, Saba, St Eustatius, St Kitts, Nevis, Montserrat, Antigua and Barbuda.

US President Bill Clinton has declared a state of emergency for the US Virgin Islands, allowing residents to apply for federal financial aid.

Fatal storm

Eight people are reported to have been killed by the storm, which has cut a swathe through the region, from Grenada in the Windward Islands to Aruba off the Venezuelan coast.

The full extent of the damage on St Croix is not yet known

US Virgin Island officials have unconfirmed reports that four people died on St Croix, which sustained a direct hit on Wednesday.

Lenny has also caused havoc as far away as South America. On Tuesday, two fishermen drowned off Colombia's Caribbean peninsula, when rains destroyed half a coastal village, leaving 540 people homeless.

One man died in the Puerto Rican capital, San Juan, after he fell from a ladder as he tried to board up windows.

And a man in St Maarten died on Wednesday when the garden wall of his home collapsed onto him.

The hurricane has taken forecasters by surprise because it formed so late in the hurricane season and has an unusual west-to-easterly direction.

The US National Hurricane Centre says Lenny is the first major hurricane this century to follow such a path.

Its unusual track has put many of the harbours and ports that are normally sheltered directly in the storm's path.