Meanwhile a landslide also damaged a 3km stretch of the Karakorum Highway on Monday, as the lake continued to expand over 23km owing to the melting of the glacier.
Several nearby areas were submerged by the overflowing of lake water, while 36 villages are still in danger of being flooded.
Thousands of people have been forced to move out of their villages and 300 more families were given a deadline to evacuate by the end of the day.
To add to the chaos, the area's boat service was suspended and replaced by a helicopter service which can be used only if an emergency arises.
The villagers are practically stranded but things might become a little easier for them in three days when Red Cross brings in much needed relief goods and medical equipment.
Officials say 1,700 people have already fled their homes after floods swept through Ayeenabad and Shishkat villages in the district of Hunza, wiping out dozens of houses.
Trade with China affected
Water from the lake has also submerged parts of Gulmit, a tourist resort on the main Karakoram Highway linking Pakistan with China.
The highway has already been closed, badly affecting trade between the two countries.
"We have suffered a loss of more than Rs500 billion since January," president of the Gilgit chamber of commerce, Javed Hussain, told AFP in Karimabad on Monday.
Trade convoys arriving in the border town of Sust are sent to Hussaini town from where they are loaded onto boats to cross the lake, Hussain said.
Then private loaders, carrying goods on their back put the cargo on jeeps for onward shipment to Gilgit, he said.
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