Hundreds of villagers, students and monks on Wednesday defied a government order to end a protest at a controversial Chinese-backed copper mine in northern Myanmar, activists said.

The standoff is the the latest case of long-oppressed Myanmar citizens testing the limits of their new freedoms following the end last year of decades of iron-fisted rule by a junta that crushed any sign of dissent.

"Hundreds of monks and villagers are still here," monk Yaywata, who goes by one name, told AFP by telephone from the site of the demonstration in Monywa in the district of Sagaing.

"We will protest until they stop the project or promise to do so," he said.

The mine, a joint venture between military-owned Myanmar Economic Holdings and Chinese group Wanbao, has been the focus of months of protests over complaints of alleged land grabbing.

The home ministry, in a statement carried by state TV, radio and newspapers, had warned protesters to vacate their camps near the mine by the end of Tuesday or face unspecified action.

But about 300 protesters were refusing to leave, activist Hein Zaw Win told AFP by telephone from Monywa.

"We received information that about 300 police officers have been deployed there. But they didn't do anything yet," he said.

The home ministry said an end to the rally was necessary to allow a parliamentary commission to make a fact-finding visit to the mine. Opposition leader Aung San Suu Kyi is also due to visit the site on Thursday.

Environmental activists were emboldened by a government order last year to halt construction of a controversial $3.6 billion mega dam in a rare recognition of public opposition to the Chinese-backed hydropower project.

Police said on Tuesday that they had arrested eight activists who protested in Yangon against the copper mine a day earlier and charged them with defaming the state.

Myanmar earlier this year introduced a law allowing peaceful protests as part of political changes sweeping the former army-ruled country.

But rights groups have criticised rules that mean demonstrators risk a year in jail if they do not seek permission five days in advance.

Campaigners called for a peaceful resolution to the mine standoff.

"The problem should be solved through discussions between the two sides. It should not be solved by force," said Kyaw Min Yu, a member of the Generation 88 movement, born during huge student-led demonstrations in 1988, which has become a key advocate for ordinary people in land and worker disputes.