Experts believe overdue eruption of Katla would wreak even more havoc on European flights than Eyjafjallajökull did last year

If you thought last year's flight-paralysing volcanic eruption from Iceland was bad, just wait for the sequel – that is the message from experts nervously watching the burps and rumbles of an even more powerful volcano.

Brooding above rugged moss-covered hills on Iceland's southern edge, Katla is bigger than nearby Eyjafjallajökull, which spewed ash all over Europe for several weeks and cost airlines $2bn (£1.2bn).

Named after an evil troll, Katla has a larger magma chamber than Eyjafjallajokul's, according to local scientist Páll Einarsson. Its last major eruption, in 1918, continued for more than a month, turning day into night, starving crops of sunlight and killing off livestock. The eruption melted some of the ice sheet covering Katla, flooding surrounding farmlands.

Now, clusters of small earthquakes are being detected around Katla, which means an eruption could be imminent, seismologists say. The earthquakes have been growing in strength, too. After a long period of magnitude-3 tremors, a magnitude-4 quake was detected last week.

"It is definitely showing signs of restlessness," said Einarsson, a professor of geophysics at the University of Iceland.

Seismologists and geologists at the university are tracking the spike in seismic activity and working with disaster officials to prepare communities near Katla such as Vik, a small town of about 300 people.

Disaster officials have also drafted an evacuation plan but many fear they may have less than an hour to evacuate once the volcano erupts.

The longer that the underground pressure from the molten rock builds up, the more catastrophic an eruption can be. Records show that Katla usually has a large eruption twice a century. Since its last eruption was almost exactly 93 years ago, it is long overdue for another, seismologists say.

Icelanders are getting nervous as they mark the anniversary of Katla's last blast. "We've been getting calls from people concerned that Katla is about to erupt because it erupted … in 1918 on 12 October," said Einar Kjartansson, a geophysicist at Iceland's meteorological office.

The eruption of Laki in 1783 was one of Iceland's deadliest. It freed poisonous gases that turned into a smog and floated across the jet stream, killing thousands of people with toxic fumes as far as away as Britain.

The aviation industry says there is little that airlines can do to prepare for a future ash cloud because decisions on closing air space rest with national regulators.

"The issue is what the regulators will allow us to do, and that's down to the precise circumstances of any future eruption," said David Henderson, spokesman for the Association of European Airlines.