Aid agencies and rescue workers in Derna told The National that mass graves and hundreds of bodies in the city and in coastal areas could contaminate water supplies.
Local authorities said at least 150 people were taken ill over the weekend after drinking unsafe water.
The torrent of mud and rock that crashed through Wadi Derna carried many of the victims out to sea, but now many are washing back to shore.
“We're mainly concerned about the bodies of victims who were thrown into the sea and still remain on the hard rock terrain of the city,” said a UAE naval rescue officer at the city's port.
“Our mission with the Libyan Coast Guard and other naval rescue missions is to work in retrieving those bodies that have washed up on to the shore. The risk of leaving them increases the risk of waterborne disease by the day. The focus now is to mitigate the effects of an epidemic that Derna might experience if we don't work fast enough,” he said.
The UN has warned a quarter of the population of the city could have been killed or injured. The estimate takes into account about 10,000 people who are still missing. The UN says at least 40,000 people have been made homeless.
Other estimates are lower, with the eastern administration estimating a death toll of about 3,500. Libya's Tripoli-based administration said on Sunday that around 900 buildings had been completely destroyed while a further 500 buildings had been severely damaged.
“I left Derna today with a heavy heart, after witnessing the devastation caused by floods on lives and properties,” Mr Bathily said on X, formerly Twitter. “This crisis is beyond Libya’s capacity to manage, it goes beyond politics and borders.”
Mr Bathily’s remarks come amid speculation that local authorities could close Derna in a move to stop the spread of waterborne disease, which may have taken hold after reports that 150 people had fallen ill.
Islamic Relief said that the number could soon swell to thousands because of a lack of clean water.
Aid agencies have urged people to avoid burials in mass graves, as well as mass cremations, saying such procedures could accelerate the spread of illness. Rescue and recovery workers said hundreds of bodies are still being found on beaches and throughout the city.
“I was here from the first day and now we're on day six and still recovering a lot of bodies by the shore,” Libyan rescue worker Housamidden Hasaan told The National.
Mr Hasaan said that the “sheer force of the storm” had forced people who had sought shelter near the corniche into the sea. “Most of the bodies I retrieved yesterday did not look humanlike anymore. The seawater basically changed how they look,” he said.
The situation in many outlying towns and villages is still becoming clear because roads and bridges have been destroyed.
The stench of death in Derna was so strong that rescuers were recovering bodies without the help of sniffer dogs or search-and-rescue technology after learning to distinguish the smell from rotting rubbish.
“We’ve been going from house to house, building to building,” volunteer Abdulqader Hasan told The National.
“Usually we’ll look for markers on the doors to check if past rescue teams have checked the house already or not.
“But it’s the smell of a dead body, it hits you almost instantly, signalling a dead rotting body is lying nearby.”
The smell was strongest in densely packed apartment blocks that dot the coastline of Derna, a city that has survived a civil war and an ISIS siege in 2014.
“This city was hostage to the extremists of ISIS,” Derna resident Mohammed told The National.
“The central mosque you see near the beach, that’s the one where residents watched as those fanatics beheaded our neighbours to scare us into submission.
“Many people sought refuge at dawn at that mosque when they were praying fajr prayers at dawn on Monday when the eye of the storm basically drowned the entire alley.”