The potential for a lahar had been anticipated and the site was intensively monitored with real time instruments such as water level sensors and geophones; with two web cams; and with periodic surveys using a terrestrial laser scanner. An emergency plan was in place and worked well. The need for caution was undeniable - on 24th December 1954 a lahar from the same site demolished a railway bridge at Tangiwai, killing 151 people on a train that tried to cross a bridge that had been destroyed by the lahar.
The event has been written up in a paper (Massey et al. 2010), and there is a spectacular set of images of the event captured by the web cam available here (NB it took me a while to get my eye into these images).
An interesting aspect of this event is that one can examine just how good the natural hazard science community is at assessing hazard. There is a New Zealand Civil Defence report, written in 2002, about the threat of a lahar at Ruapehu online here.
Massey, C., Manville, V., Hancox, G., Keys, H., Lawrence, C., and McSaveney, M. 2010. Out-burst flood (lahar) triggered by retrogressive landsliding, 18 March 2007 at Mt Ruapehu, New Zealand—a successful early warning. Landslides 7 (3),303-315, DOI: 10.1007/s10346-009-0180-5.