Adelaide Hills dam 'was ready to give way'

South Australia's State Emergency Service says water levels in the 10- to 14-megalitre Echunga dam have dropped by more than two metres, preventing any sudden failure.

Concerns were raised on Tuesday afternoon after signs of slippage along the main dam wall.

Fears of a major collapse grew that night, with an emergency warning issued early on Wednesday.

The SES said up to 40 houses would be flooded with at least ankle-deep water if the dam gave way, with those residents urged to leave their homes.

Pumps were brought in to reduce water levels, and a spillway was cut to allow water to drain away safely. By Thursday afternoon that had removed up to 60 per cent of the dam's capacity.

With the emergency warning downgraded, residents were advised they could return to their homes, and roads were reopened.

SES incident controller Craig Brassington said the dam had drained quicker than originally expected and the area was now declared safe.

However, he said recent inspections of the area had revealed how close it was to collapsing and causing major issues for the town.

"They were lucky. It was almost ready to give way," Mr Brassington said.

He said that while more rain was forecast for the area next week, it was not expected to cause further issues at Echunga.

However, Mr Brassington urged other property owners to inspect their own water holdings and take action if necessary.

Premier Peter Malinauskas said it was a great relief the situation appeared under control.

"There's still work that remains to be done, but all things look like they're on track," he said.

The premier said the government and the SES would discuss mitigating similar risks at other sites, at the same time reminding property owners of their own responsibilities.

"With so much rainfall in recent times, this is a situation we're going to have to monitor throughout the state," Mr Malinauskas said.

"Certainly the events of the last 24 hours have highlighted that this is a situation we need to monitor very closely."

There are an estimated 30,000 private dams across South Australia.