Queensland police are reportedly looking at the possibility the drug ice may have been a factor in the horrific stabbing murder of eight children in Cairns.

Mersane Warria, the mother of seven of the children and aunt of the eighth, was arrested for murder overnight and remains under police guard at Cairns Hospital.

She is yet to be charged, but police have said they are pursuing no other suspects.

Now it has emerged investigators are considering the possibility drug use may have brought on a psychotic episode, News Corp has reported.

Ms Warria was apparently enraged after staying up all night searching for a missing girl who lived at the house.

Mersane Warria five years ago at Cairns Hospital. She has been arrested over the death of eight children.(Supplied)

When the girl returned they fought, and the teenager fled.

Father tells of his grief after daughter killed in Cairns house of horror

Police have now positively identified the victims as four girls, aged 14, 12, 11 and two, and four boys, aged nine, eight, six and five.

The children's former babysitter has also spoken out, saying the mood in the house changed several months ago.

Cristal Atkinson had watched the children up to four times a week before Ms Warria stopped calling her around.

She said in the days leading up to the deaths, the children were made to sleep on mattresses in the backyard, while Ms Warria was seen behaving eratically around the neighbourhood.

"She was saying she wanted to start a new life," Ms Atkinson said.

Community members have paid tribute to the children by laying flowers and soft toys on the curb across the road from the house. (Getty)

Police were called to the family’s house on Murray Street, Manoora, about 11am yesterday after reports of shouting and screaming. It is believed a 20-year-old old man arrived home and discovered the bodies of his siblings and cousin, aged between 18 months and 15 years. Police arrived a short time later.

The mass murder has left the Far North Queensland city in shock and tributes have begun to amass out the front of the home.

A Queensland Police Service spokesman said pathologists had now begun the autopsy of the children as police attempt to piece together exactly what happened.

“Every minute we have a better understanding of what has occurred,” he said.

“The investigation is still being conducted but I can guarantee you that when this investigation concludes we will have an idea of every minute of what has occurred there.”

He said forensic officers were still at the house and did not expect to finish their work for several days.

Three women, believed to be relatives of the victims, near the scene of the crime. (AAP)

Ms Warria, 37, is in a stable condition and is in hospital with stab wounds. Police have been able to speak with her, Detective Inspector Asnicar said.

"At this time she is awake and lucid and able to speak," the police spokesman said.

He would not speculate on whether charges would be laid for all eight murders but said police were not looking for "anybody else".

This morning, the father of Ms Warria's 14-year-old niece, said he had been devastated by her death.

I've lost a beautiful daughter," the elderly man told AAP.

"What for? What has she done?"

He last saw his daughter the night before she died at a local McDonald's restaurant where she was eating dinner with friends.

"I said come with me but she said: `Oh no dad, I'm going with my friends, my aunty,'" he told AAP.

A nearby community support centre is also open and providing support, including counselling, to members of the community.

Cairns Regional Council Mayor Bob Manning told the TODAY show the community was still in shock, but would attempt to move forward.

Cairns state Liberal MP Gavin King told ABC the local community was devastated by the incident.

"This area has had its ups and downs, but that’s not out of the ordinary, most communities have their ups and downs," Mr King, who is also the former chief of staff and editor at large of the Cairns Post, said.

"I think something like this is such a shock, it's completely out of the blue.

"It's completely incomprehensible."

Police are expected to provide an update on the tragic situation this morning.

Anyone distressed by this story should contact Lifeline Australia on 13 11 14.

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