I posted some stuff about this just few days ago...
www.es.ucsc.edu... (look that map showing signs of past landslidesn Canary Islands)
Here's more stuff to read:
 The sizes of deposits are enormously variable although Holcomb & Searle (1991) report that many single landslides affecting oceanic volcanoes
may have been sufficiently large as to involve the transport of up to 20% of the edifice volume. Some of the Hawaiian landslides have volumes greater
than 5000km3 and lengths in excess of 200km making them the largest such structures recorded on Earth (Moore et al., 1992)...
The Hawaiian Ridge, extending from near Midway Island to Hawaii, provides by far the most impressive evidence for volcano instability and collapse in
the marine environment. Following a cooperative submarine survey by the United States Geological Survey and the UK Institute of Oceanographic
Sciences, using the GLORIA side-scan sonar system, sixty- eight landslides with lengths in excess of 20km have been identified. 
So instead of will it happen, question is when it happens and how big it is.
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I believe you are talking about the volcanic islands or Canary islands which I heard on a TV show that a large chunk of one volcano was already
slipping (it slipped and left visible cracks in the 1940's and then stopped). It's not a matter of it will cause a massive tidal wave but when and
how big. The entire East Coast of the US and other countries in the Atlantic and possibly around the world will be hit hard, very hard I believe. I
heard tidal waves on the US east coast could be higher than virtually any common skyscraper and reach 100 miles inland. Even if as someone is saying
that they think new studies indicate it will slide off in smaller chunks, if a tidal wave goes inland only a mile or two such as one did in the Indian
Ocean area just the other day, it will devastate coastal areas.
However, on the TV show discussing this, they also stated that this could happen soon or hundreds of years from now. So I'm sure that most Americans
will not worry about this because most of us are only concerned about tomorrow and willing to put off any early warning tsunami system for decades.
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Scary, I guess it is possible.
Those cayman islands are over a mile high! 8000 feet! www.volcanolive.com... 2426 Meters!
The largest island is only like 35 miles long though.
The water around the islands is pretty deep too so that could work in favor of a big wave.
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The "mega-tsunami" hazard from the Canary Island volcano has been widely overhyped and misrepresented. Those of us on the East Coast need not worry
about Cumbre Vieja smashing up and falling into the ocean.
Debunked as per NOAA & the Tsunami Society...
Most recently, the Discovery Channel has replayed a program alleging potential destruction of coastal areas of the Atlantic by tsunami waves
which might be generated in the near future by a volcanic collapse in the Canary Islands. Other reports have involved a smaller but similar
catastrophe from Kilauea volcano on the island of Hawai`i. They like to call these occurences "mega tsunamis". We would like to halt the
scaremongering from these unfounded reports. We wish to provide the media with factual information so that the public can be properly informed about
actual hazards of tsunamis and their mitigation.
Here are a set of facts, agreed on by committee members, about the claims in these reports:
- While the active volcano of Cumbre Vieja on Las Palma is expected to erupt again, it will not send a large part of the island into the ocean, though
small landslides may occur. The Discovery program does not bring out in the interviews that such volcanic collapses are extremely rare events,
separated in geologic time by thousands or even millions of years.
- No such event - a mega tsunami - has occurred in either the Atlantic or Pacific oceans in recorded history. NONE.
- The colossal collapses of Krakatau or Santorin (the two most similar known happenings) generated catastrophic waves in the immediate area but
hazardous waves did not propagate to distant shores. Carefully performed numerical and experimental model experiments on such events and of the
postulated Las Palma event verify that the relatively short waves from these small, though intense, occurrences do not travel as do tsunami waves from
a major earthquake.
See www.sthjournal.org... for the full story
See the following link (it is a .pdf) for the April 2003 International Tsunami Information Center Newsletter that contains info on this subject
www.prh.noaa.gov...
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Originally posted by orionthehunter
The entire East Coast of the US and other countries in the Atlantic and possibly around the world will be hit hard, very hard I believe. I heard
tidal waves on the US east coast could be higher than virtually any common skyscraper and reach 100 miles inland. Wrong show... that would be
result of "dino-killer" hit to ocean. (but in that case tsunamis would be smallest of your worries)
Collapse of its western flank would cause that high tsunami only in close islands but thousands kilometers away it wouldn't be so much bigger
compared to "normal" tsunamis.
EDIT:
"extremely rare events, separated in geologic time by thousands..."
Just as notice, this is "PR stuff", not from scientific report... in geologic timescale thousand years is blink of eye. 
[edit on 2-1-2005 by E_T]
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The collapse could do major damage in one of two ways, as I understand the situation.
1. A full collapse of a large, intact section of the rim could act like a plow sliding down the side of the sea wall. It could displace countless
cubic feet of water at very high speed, which would creat a very large wave form that would travel across the globe. This type of catastrophic
collapse is sure to cause a tsunami.
2. A partial collapse leading to an avalanche effect down the sea wall. If any large material gets dislodged, along with smaller debris, it could
cause an avalanche that could end up displacing a very significant amount of water, perhaps enough to create a large tsunami, perhaps not.
The scenario in which everything is fine is one where small sections, or even large sections, fall one by one, and create individual wakes, each small
and posing no immense danger. Any one of these scenarios is possible, and what people should be looking into is management of the situation, perhaps
shoring up the slope, or controlled demolition, or carting it away in dump trucks, I don't know. What I do know is that there's no reason to take
comfort for granted, especially when we have the means at our disposal to remedy these kinds of situations.
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