Ngurah Rai International Airport spokesman Arie Ahsanurrohim said that flights were operating normally. Authorities said the air around Denpasar, the Bali provincial capital, is clear from ash.

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Australian tourists are flocking to Bali for the holidays, and a number of travel insurance companies now refuse to insure people for eruptions of the mountain.

More than 140,000 people fled the area around the mountain in late September after its alert status was raised to the highest level, indicating an eruption may be imminent. The alert status was lowered two weeks later, allowing for the return of those displaced from government shelters.

An eruption in 1963 killed about 1100 people. Agung lies about 70 kilometres north-east of Bali's tourist hotspot of Kuta.

It is among more than 120 active volcanoes in Indonesia, which is prone to volcanic eruptions and earthquakes because of its location on the so-called "Ring of Fire," a series of fault lines stretching from the Western Hemisphere through Japan and Southeast Asia.

Last week, Anak Krakatoa in Indonesia's Sunda Straits erupted and collapsed into the sea, causing a tsunami that killed 431 people on Java and Sumatra. More than 46,600 were displaced.

AP