Tropical cyclone Heta, packing winds of almost 300kmh, slammed into the island of about 2100 people, just east of the international dateline on Monday, officials said on Wednesday.
"I'm absolutely worried for my little country," Niue Premier Young Vivian, who has declared a national disaster, told Radio New Zealand in Auckland.
The island's only hospital had been damaged and communications were cut when Niue's only satellite dish was damaged in the huge storm.
New Zealand foreign office officials said they had been able to contact their High Commissioner Sandra Lee, by satellite telephone in the only foreign embassy in Niue, the world's largest coral island.
"She's described it as the worst cyclone in living memory. She said that the main town which is called Alofi has been flattened," said Ministry of Foreign Affairs and Trade spokesman Brad Tattersfield.
"I'm absolutely worried for my little country. Any cyclone with that force is going to wipe out whatever efforts we have made in the past years in terms of agricultural products"
He said a woman died and her baby was seriously injured when their house collapsed on them at the height of the storm, on Tuesday Another man had suffered a broken hip, he said.
Vivian, who was in Auckland arranging his wife's funeral when Heta struck, said damage was widespread.
"(There are a) suspected two people missing and one seriously injured with head injuries and broken bones," he said.
Request for aid
"They are requesting medical supplies, water pumps and some tents. I believe that a number of houses were seriously damaged," said Vivian, who will return to his battered island on Thursday.
A New Zealand air force C-130 flight carrying medical supplies, shelter and water will leave on Thursday morning for Niue, 2700km northeast of New Zealand capital of Wellington, officials said.
Vivian will also be on board, along with two New Zealand officials who will assess the damage.
Damage to crops
Vivian feared long-term damage had been caused to Niue's few cash crops such as taro, vanilla and limes. Niueans hold
New Zealand citizenship and Vivian feared many would now simply choose to emigrate rather than rebuild their country.
"Any cyclone with that strength, that force, is going to wipe out whatever efforts we have made in the past years in terms of agricultural products," he said.
Niue, measuring just 260sqkm and once known as Savage Island, took the full brunt of Heta after the first major cyclone of the season brushed past neighbouring Samoa, American Samoa and Tonga.
About 1.5 times the size of Washington, DC, Polynesian Niue has been a self-governing state since 1974, in free association with New Zealand, which administers its foreign affairs.