AS the Indian Ocean tsunami alert is cancelled, a holidaying Geelong man tells of chaos as thousands flee to higher ground.

The Pacific Tsunami Warning Centre cancelled its tsunami alert after sea levels failed to significantly rise two hours after the first Indonesian quake at 2.30pm yesterday, the Herald Sun reports.

Tourists were forced to flee amid fears of a tsunami following two huge earthquakes off the the island of Sumatra yesterday afternoon.

The earthquakes - measuring 8.6 and 8.2 in magnitude - triggered tsunami warnings for 28 countries lining the Indian Ocean including Indonesia, Thailand, Singapore, India, Malaysia and Sri Lanka.

A Geelong man said he was forced to flee a Phuket bar as thousands of people scrambled to higher ground following the tsunami alert.

Peter Williamson, 30, said it was total chaos as tourists and locals ran from the beachfront to a nearby mountain.

"We were having a few drinks at a bar and people just started bolting down the street. One of my mates heard someone yell 'tsunami'," Mr Williamson said.

"We bolted. Everyone was panicking at the start but once we got a fair way up the mountain everyone relaxed a bit."

He said thousands of people, many Australians, were now waiting on a nearby mountain in Pa Tong.

Despite many returning to their hotels, he said he and his five friends would wait for the threat to totally subside.

"We're not staying in a high rise. We're a couple of hundred metres back from the beachfront but we're on the same level. So we're just waiting it out until it's definitely safe to go back," he said.

Mr Williamson said there were no local authorities directing the panicked crowd.

"We really don't know what's going on, there's no authority up here and we're being guided on watching the locals walk back down," he said.

Victorian woman Kelly, who wouldn't give her last name, said her family was in an ocean-front resort in Phuket when the first quake struck.

"They say there are people running everywhere. It's just chaos,'' she said.

Australian Bonnie Muddle, holidaying in Phuket, said people were being evacuated from popular tourist areas including Krabi and Phang Nga bay.

The Phuket airport was closed temporarily.

Sea-level readings indicated a tsunami measuring 1m reached Meulaboh, Indonesia. A water-level increase of about 0.3m was reported in Sabang, and a 10cm tsunami was reported on the Thai coast.

The first quake struck at a depth of 23km, the US Geological Survey (USGS) reported. Its epicenter was located 434km southwest of Banda Aceh, where 170,000 people were killed in a 2004 tsunami.

An 8.2-magnitude aftershock struck off Sumatra at 4.40pm (7.40pm AEST). The aftershock, which lasted for four minutes, struck 615km from Banda Aceh.

Experts said the first quake was caused by tectonic plates moving horizontally on the sea floor and that the chance of a large-scale tsunami was minimal.

Geoscience Australia senior seismologist Clive Collins said there were several reasons why the initial quake wasn't as catastrophic as the 2004 Boxing Day earthquake.

"Firstly, the size of it: it was 8.6 to our best estimate, whereas one in 2004 was 9.2, so it’s considerably smaller," he said.

"It was also a lot further away, whereas the last one was much closer," he said.

British Prime Minister David Cameron was in Jakarta at the time the first earthquake struck.

Mr Cameron held a news conference in Jakarta with Indonesian President Susilo Bambang Yudhoyono, who said there were no reports of any casualties from the first quake.

An AFP correspondent in Banda Aceh said the earthquake "began as a mild tremor and then got stronger," adding that the ground shook for about five minutes and telephone connections went down briefly.

"There are people trying to evacuate. Some are praying, and children at a school were panicking as teachers tried to get them out," he said yesterday.

"There are traffic jams everywhere as people are trying to get away from the coast - many are on motorcycles."

People living along India's eastern coast were told to move away from the shore. Tremors were felt in the cities of Kolkata, Chennai and Bangalore.

Read more at the Herald Sun.