Police at remote Croker Island in the Northern Territory say the local community has escaped serious damage from a category two cyclone.
Tropical Cyclone Grant intensified into a category two system late on Christmas Day and came within kilometres of Croker Island.
The Bureau of Meteorology says the storm brought winds of 130 kilometres per hour and torrential rain.
Residents of the island's community of Minjilang, about 230 kilometres north-east of Darwin, took shelter in their homes, and about 70 weathered the storm at a cyclone shelter.
But Minjilang police station sergeant Jeff Pickering says conditions have now begun to ease and there have been no reports of major damage.
"Our initial assessment shows there has been no structural damage to any buildings," he said
He says some power lines have fallen and most of the community's trees are down.
The local power station was shut earlier today and will remain closed until power lines are restored.
Earlier, the weather bureau's director of emergency services, Peter Davies, said the cyclone has caused some damage to Croker Island.
"Minjilang on Croker Islands is copping the brunt of the storm," he said.
"There's trees down with significant damage to roads, the power is off and obviously a lot of people in cyclone shelters."
Tropical Cyclone Grant is moving south across the Coburg Peninsula.
The weather bureau predicts it will cross Van Diemen's Gulf overnight and reach land north of Jabiru in Kakadu National Park by the morning.
Residents living from west of Maningrida to Snake Bay, including Cape Don, Croker Island and Goulburn Island, have been advised to take shelter immediately.
The bureau has told residents from Darwin to Milingimbi, including inland to Jabiru and Oenpelli, to make final preparations to their home shelters or decide which public shelter to use.
Rueben Cooper and his wife Dawn live at Mount Norris Bay on the Coburg peninsula and have spent Christmas sheltering in their home.
Mr Cooper says he has survived some cyclones, including Cyclone Tracy in Darwin, but the experience is not something you get used to.
"Now it's building up more and more tonight and where it is now, we're not really happy about it because it's right where we are and it's going to come into our bay in Mount Norris Bay," he said.
"It is scary tonight, it is, especially being dark."
Did you spend Christmas in a cyclone-affected area?
Earlier on Sunday, the bureau's Alasdair Hainsworth said wild weather had started battering residents on the Coburg Peninsula.
"It's really very, very strong indeed and it's raining quite heavily," he said.
The manager of a resort on the Coburg Peninsula, David Gyles, said his staff and guests were well prepared.
He said they had eaten Christmas lunch and were battening down.
"We're following our own procedures and we take it quite seriously, but for people this is an experience, and we're not in panic mode or anything like that."
The system developed into a category one cyclone early on Sunday after hovering as a tropical low over the Arafura Sea since Wednesday.
Territory coastal communities have been preparing for an impending cyclone for several days.
NT police are warning people in the areas expected to be hit by the cyclone to decide early where they are going to shelter and not to try to drive once the weather turns bad.
Cyclone shelters have opened in remote communities in the cyclone's path.
But with the cyclone moving away from Darwin, residents in the Territory's capital were able to enjoy a relatively fine Christmas Day.
© ABC 2011
00:28 EDT North Queensland is keeping a close watch on Ex-Tropical Cyclone Gillian and Cyclone Hadi.