Hundreds of Buddhists carrying sticks and swords went on a rampage in a village in north-western Burma, setting fire to dozens of homes and shops after rumours that a young woman had been sexually assaulted by a Muslim man.

There were no reports of injuries in the latest round of sectarian violence to sweep the country.

The hours-long riot in Htan Gone, located 16 kilometres (10 miles) south of the town of Kantbalu in the Sagaing region of Burma, began late on Saturday after a crowd surrounded a police station, demanding that the assault suspect be handed over, a police officer told the Associated Press. The officer requested anonymity because he did not have the authority to speak to reporters.

State television reported that about 42 houses and 15 shops – most belonging to Muslims – were burned and destroyed before security forces shot in the air to disperse the mob early on Sunday.

The predominantly Buddhist nation of 60 million has been grappling with sectarian violence since the military rulers handed over power to a nominally civilian government in 2011.

The unrest, which has killed more than 250 people and left 140,000 others displaced, began last year in the western state of Rakhine, where Buddhists accuse the Rohingya Muslim community of illegally entering the country and encroaching on their land.

The violence, on a smaller scale but still deadly, spread to other parts of the country this year, fuelling deep-seated prejudices against the Muslim minority and threatening Burma's transition to democracy.

Almost all of the victims have been Muslims, often attacked as security forces stood by.

Aung San, a 48-year-old Muslim man whose house was burned in the violence in Htan Gone, said: "People descended on our village with swords and spears, and sang the national anthem and began destroying shops and burned houses.

"Police shouted at the mob to disperse, but did not take any serious action."

Aung San, who lives with his parents, who are in their 70s, said his family had to flee.

"We hid my parents and two sisters in a cemetery before the mob burned our house, and we fled later," he said. He and his family were taking refuge at a Muslim school on Sunday.

Myint Naing, an opposition politician who represents constituents in Kantbalu, was outraged by the latest violence.

He said Muslims and Buddhists have lived side by side in the area for many years.

"There is a mosque in almost every village in our township and we live a peaceful co-existence," he said as he headed to the scene, adding that at least one mosque had been burned down in the violence.

"I cannot understand why the authorities were unable to control the crowd when it originally started," he said.