Seven children were among at least 14 people killed when a huge mudslide hit a bus stop in a remote area of Papua New Guinea.

Heavy rain in the Eastern Highlands caused a hill to give way near the rural bus stop.

An avalanche of mud slammed into the area and engulfed two buses and three houses near Watabung on the Okuk Highway.

Disaster authorities say it is unclear just how many people have been killed because recovery efforts are being hampered by local landowners.

They are demanding compensation money from the Government before allowing the search to take place.

A smaller landslip had cut the highway on Monday and buses were stopping at either side of the debris to allow people to walk across and continue to their destinations when the second landslide occurred, said National Disaster Service chairman Manasupe Zurenuoc.

"What has occurred is unfortunate. People living along the highway must take precautions during this heavy downpour the country is experiencing," he said.