MIANYANG, China - Evacuees hauled mattresses and carts down from temporary camps in the hills Wednesday after Chinese authorities declared the flood threat over from an earthquake-formed lake that was drained the day before.

On the eve of the one-month anniversary of the May 12 quake that killed nearly 70,000 people, soldiers, medical workers and politicians gathered in Beijing's Great Hall of the People to hear emotional testimonials about the massive aid effort.

The event was organized by the Communist party's propaganda department and broadcast live on state television, underscoring the government's emphasis on positive coverage amid a long and daunting recovery effort.

In Sichuan province, authorities had evacuated 250,000 people out of concern of a breaching of Tangjiashan lake formed when landslides blocked a river above the destroyed town of Beichuan, the largest of 30 created by the quake.

People in Mianyang, the largest urban area directly threatened by the quake lake, were again setting up tents and improvised shelters along city sidewalks, confident the flood threat had passed.

Soldiers helped people carry mattresses and carts as motorized vehicles passed by, loaded with plastic stools and bottled water.

Although they remained homeless, residents said the conditions closer to home were far superior to those in the hastily erected camps in the hills where some had been living for almost two weeks.

"Life wasn't so good up there. When it rained the water didn't drain and sometimes it reached up to our ankles,'' said street sweeper Zhao Shuping, 46, who sought shelter on higher ground on June 2.

The Fu river running through the city was running high and fast, and life remained far from returning to normal. Many city residents continue to sleep outdoors because of damage to their apartments or fear of the aftershocks that continue to shake the region. Large numbers of businesses were closed, some with sandbags stacked at their entrances to guard against flood waters.

Soldiers dug a diversion channel and blast away boulders and large debris with dynamite, bazookas and recoilless guns to speed up the drainage of the lake. On Tuesday, churning waters poured through a man-made sluice and engulfed low-lying, empty towns but spared larger areas downstream.

Sichuan's top leader, local Communist Party chief Liu Qibao, called it a "decisive victory'' over the flood threat.

At the Taohuashan camp overlooking the town of Qinglian, about 3,000 evacuees were still waiting for permission to return home. Authorities had told them they needed to disinfect the area before it would be safe.

Evacuees were suffering from exposure, with 10 people recovering in a clinic from heat stroke and numerous cases of the common cold.

"I'm relying on the government to help me. I have no choice. I have nothing left,'' said Xu Daijin, a 56-year-old farmer who was tending to a pair of pigs he kept in a pen a short distance from the tents.

China has ordered government departments to cut spending to free-up reconstruction funds for the estimated five million people made homeless, few of whom had insurance.

Citing the China Insurance Regulatory Commission, the official Xinhua News Agency said insurance companies had paid $41 million on 249,000 life and property insurance claims as of June 9.

Planning experts have recommended that more than 30 towns in the quake-hit areas, including the local government seat of Beichuan, be rebuilt elsewhere, according to Caijing, a leading Chinese business magazine.

Caijing said towns recommended for relocation were seriously damaged during the quake, with some sitting on or near fault lines.

Beichuan, for example, may be relocated to an adjacent town of Anxian, and political divisions could be readjusted with rebuilding plans, Caijing reported.

A Sichuan government construction bureau official, who gave only his surname, Liu, said the list of towns to be relocated had not yet to been finalized.