A total of 580 homes north and south of the River Steeping in the town of Wainfleet All Saints have been told to evacuate.
Military helicopters were deployed to the area yesterday, after the river burst its banks at Thorpe St Peter.
Temporary repairs on the river have started to deteriorate, officials have said.
A Sky News crew on the ground was told there is a problem with the original breech, which is now slowly seeping, and there is another crack that has appeared further down the bank.
A Chinook helicopter was deployed to drop sand in Wainfleet All Saints yesterday to try and stop the flow of water from the River Steeping and a Puma was also being used.
Officials say the next 24 to 48 hours will be crucial, depending on the amount of rainfall, as they wait for the waters to subside.
Source: Sky News