(Adds details on storm impacts throughout)
By Jolyn Rosa
HONOLULU, Aug 24 (Reuters) - Hurricane Lane crept closer toward the heart of the Hawaiian islands on Friday as it weakened into a Category 1 storm while still drenching the Big Island with torrential rains and severe, widespread flooding, weather and civil defense officials said.
The storm, packing sustained winds of up to 85 miles per hour (140 kph), was forecast to make its nearest approach to land just west of the island chain over the weekend, bringing hurricane conditions to Maui and the U.S. state's most populous island, Oahu, starting on Friday night.
Farther north, a tropical storm watch was posted for the island of Kauai.
"If you're in Hawaii, it's critical that you heed the warnings of local officials and stay aware of your surroundings," Federal Emergency Management Agency (FEMA) chief Brock Long wrote on Twitter.
The biggest immediate danger was posed by flooding and mudslides that could grow worse the longer the storm, even in its weakened state, lingers close to the Pacific island chain, soaking the landscape.
But by midday forecasts made clear that Hawaii had been spared from the threat of its first direct hit by a major hurricane in a quarter-century, though many residents had already boarded up windows of their homes as a precaution.
Lane was downgraded on Friday to a Category 2, then to a Category 1, the lowest ranking on the five-step Saffir-Simpson scale, as it churned through the Pacific about 120 miles (190 km) south of Oahu, the National Weather Service said.
The storm was expected to continue drifting slowly northward and weaken over the next 12 hours before trade winds begin pushing it sharply off to the west and away from land on Saturday, Weather Service forecaster Leigh Anne Eaton told a news conference in Honolulu.
Forecasts called for Lane, which peaked as a Category 5 hurricane earlier in the week, to diminish into a tropical storm by Sunday.
Still, the storm posed a considerable weather hazard to parts of the state, with the island of Hawaii, popularly known as the Big Island, bearing the brunt of torrential downpours from Lane.
As of Friday morning, more than 2 feet (60 cm) of rain had fallen in a 36-hour period on the Big Island's windward side, where the Weather Service reported "catastrophic flooding" and wind gusts peaking at 67 mph (108 kph). Eaton said some parts of the island had received nearly 3 feet of rain.
A number of structures on the Big Island were destroyed and some residents were reported to be fleeing their homes, said Melissa Dye, a Weather Service spokeswoman in Honolulu.
Fire department personnel have conducted several rescues of people stranded by high water on the Big Island since Thursday, mostly around its biggest city, Hilo, said Kelly Wooten, a Hawaii County civil defense spokeswoman.
Overnight, the National Guard and fire department rescued six people and their dog, and two hikers were rescued by helicopter near the camping destination of Waimanu Valley, Wooten said. There were no injuries.
She said two Hilo-area neighborhoods were evacuated.
Flash flooding and mudslides on the Big Island also have forced a number of road closures, and Governor David Ige urged residents to avoid any unnecessary travel.
On Oahu, where 70 percent of Hawaii's 1.4 million residents live, Honolulu Mayor Kirk Caldwell told the Weather Channel that the city has moved its emergency-response equipment to higher ground for the time being.
He said Honolulu, the state's capital and largest city, is vulnerable to floods and landslides because it is partly ringed by mountains.
"We have asked our residents in these areas where they know it floods to be ready to leave," Caldwell said, adding that 1,100 people were staying in emergency shelters throughout the city.
Later remarking on the storm's slow pace, the mayor said, "Lane is in the slow lane and doesn't want to go away."
Adding to anxiety levels on Maui, which remained largely dry early in the day, a flurry of three wildfires of unknown origin quickly scorched 800 acres (323.75 hectares) on the western end of the island.
The fires forced the evacuation of nearby homes and a storm shelter, and one woman was hospitalized with burns before the flames were brought under control. The cause remained under investigation, county authorities said.
Hawaii's major airports were largely unaffected by the storm, though several airlines canceled service to Kahului Airport on Maui in anticipation of severe weather, the state transportation department said.
All public schools, University of Hawaii campuses and nonessential government offices on the islands of Oahu and Kauai were closed through Friday, and all harbors remained closed to incoming vessels.
Oil company Par Pacific Holdings Inc said it had shut down its 93,500 barrel-per-day refinery in Kapolei.
Besides upheaval for residents of flood-prone areas, the storm has spoiled vacation plans throughout the islands.
Australian tourist Nicole Paterson, 27, said she was forced to cancel outings to snorkel with sea turtles along Oahu's North Shore on Friday and to visit the Disney resort in Ko Olina.
"Today is my birthday and all of my birthday fun has been ruined and everything is closed," she said. (Reporting by Jolyn Rosa Additional reporting by Diane Craft in Kailua, Brendan O'Brien in Milwaukee, Makini Brice in Washington, Alex Dobzinskis in Los Angeles and Gabriella Borter in New York Writing by Daniel Wallis and Steve Gorman Editing by Toni Reinhold and Sandra Maler)