Police poured into a village near Sri Lanka's capital ahead of the funeral Sunday of a teenager shot dead by troops during a protest against contaminated water, residents said.

Security in Weliweriya village was strengthened as a hospital official said a third person had died after succumbing to injuries sustained during the army's crackdown on the residents' protest on Thursday.

"We have another three people in the intensive care and their condition is serious," spokeswoman for the hospital in Colombo, Pushpa Soysa, told AFP.

Police said 17-year-old Akila Dinesh Jayawardena was killed when troops fired at unarmed residents demonstrating against a factory which they accused of discharging chemical waste and polluting ground water.

Jayawardena was buried Sunday evening amid tight security by police commandos who were seen near the village cemetery too.

Mourners returning from the burial stopped briefly at the village centre to shout slogans denouncing the authorities and pressing their demand for safe drinking water. They dispersed peacefully, witnesses said.

Roman Catholic priest Lakpriya Nonis said armed troops stormed his St. Anthony's church shortly after Thursday's protest and assaulted men, women and children who had sought refuge there.

"They came into the church premises and assaulted people sheltering inside," the priest told reporters after Sunday's burial.

Official sources said nearly 50 people were injured with most of them suffering bullet wounds while some had been beaten with sticks and rifle butts.

The privately-run Sunday Times said up to six people had been killed and that authorities were not revealing the total number of casualties.

The burials of the other two victims are yet to be decided, locals said. The second victim died of his injuries overnight on Friday.

"There are a lot of police at the funeral as well as in the neighbourhood," a resident of Weliweriya village, who requested anonymity, told AFP by telephone.

Military spokesman Brigadier Ruwan Wanigasooriya said the army withdrew from the area late Saturday. Residents may be mistaking police Special Task Force Commandos dressed in camouflaged uniforms as troops, he added.

"We don't have any presence in the area now. We have launched an investigation into the incident," Wanigasooriya said, while declining to say what disciplinary action would be taken.

Criticism by the opposition and rights groups of the army's use of force has mounted since the shootings. Private television networks have broadcast footage of troops opening fire at unarmed residents.

The shootings come ahead of a visit to the island by the UN rights chief Navi Pillay later this month.

The independent Lawyers Collective on Saturday condemned the crackdown, including live firing, against the protest to demand clean drinking water for thousands of residents of Weliweriya, 20 kilometres (12 miles) northeast of Colombo.

Dipped Products Ltd, a publicly listed company, said Sunday they were not responsible for the pollution at Weliweriya, but were cooperating with environmental tests under way by authorities.

Its factory remains shut because of the protest.

Pillay is due in Colombo on August 25 on a five-day visit in connection with allegations that Sri Lankan troops killed up to 40,000 civilians in the final stages of an ethnic war with Tamil rebels in 2009.

Sri Lanka has denied that its troops were responsible for killing civilians or committing any war crimes, but EU lawmakers last month urged Colombo to ensure accountability in the face of what the UN calls "credible allegations".