Engineers at Toddbrook Reservoir in Derbyshire said they remain “very concerned” a damaged dam wall could burst and flood a nearby town with around 1.3 million tonnes of water.
Canal and River Trust runs the reservoir, and CEO Julie Sharman said it is a “critical situation”.
“Until we're beyond that critical situation, the risk is a material risk and that's why we've taken the action we have,” she said.
An RAF Chinook helicopter has spent Friday morning dropping one-ton sandbags to support the damaged part of the dam structure.
Prime Minister Boris Johnson said: “First responders, engineers and RAF crews are working around the clock to fix the dam.”
He has ordered Environment Secretary Theresa Villiers to chair a meeting of the Cobra emergency committee.
Sustained heavy downpours across the region have caused flash floods and much of the water has rushed into the reservoir.
The Canal and River Trust said improving weather conditions meant dam water levels had reduced by around eight inches overnight.
Despite this, thousands of people who were evacuated from the nearby town of Whaley Bridge on Thursday have been told to stay away indefinitely.
Police said it "poses a significant threat to life" and there is a high probability of severe flooding in the town.
Local resident Carolyn Whittle spent the night away from her home and said she had never seen anything like it.
“I've lived in Whaley for the best part of 45 years and I've never seen water flood over the dam like that, ever, nor thought that we could possibly be at risk in this way,” she said.