Nepalese guides on Mount Everest say they have decided to abandon this year's climbing season, to honour 16 colleagues killed in an avalanche last week.

Tuesday's decision throws the plans of hundreds of foreign mountaineers into chaos, with many of them waiting in base camp after paying tens of thousands of dollars to scale the world's highest peak.

The sherpas perform essential tasks on the 8,848-metre (29,029-foot) mountain, carrying equipment and food as well as repairing ladders and fixing ropes to reduce risks for their clients.

"We had a long meeting this afternoon and we decided to stop our climbing this year to honour our fallen brothers. All sherpas are united in this," local guide Tulsi Gurung told AFP from base camp.

"Some guides have already left and others will take about a week to pack up everything and go," said Gurung, whose brother is among those missing after an avalanche last Friday killed 13 sherpas and left three missing and presumed dead.

Another guide, Pasang Sherpa, added: "Sixteen people have died on this mountain on the first day of our climb. How can we step on it now?"

The guides had threatened to cancel all climbing on Mount Everest and issued an ultimatum to the government, demanding higher compensation, an agreement to revise insurance payments and a welfare fund by next Monday.

The decision to abandon the season appeared to pre-empt the outcome of talks underway in Kathmandu. High-profile Western mountaineers headed to the capital Tuesday afternoon to seek a resolution to the crisis.

"They have decided that compensation is not the only issue, they feel like they have to close down Everest this year as a memorial to those who died," said Ed Marzec, an American climber who spoke to AFP from base camp.

"They also want to stage a protest next month in Kathmandu and they say they can't do that if they are on the mountain," he added.

Marzec, a retired lawyer who hoped to become the oldest American to conquer Everest at the age of 67, said the atmosphere at base camp was souring fast - with some climbers putting pressure on sherpas so they would stay on and help them summit.

His views were echoed in an online account by veteran mountaineer Tim Rippel, who leads expeditions with his company Peak Freaks.

"Sherpa guides are heating up, emotions are running wild," Rippel wrote on his blog earlier in the day. "Things are getting very complicated and there is a lot of tension here and it's growing," he wrote.

Relations between local guides and Western mountaineers hit a low last year when a brawl broke out between three European climbers and a group of sherpas.

As the government considered the sherpas' demands, mountaineers Russell Brice and Alan Crampton, owners of leading expedition organisers Himex and Altitude Junkies, left for the capital to meet tourism ministry officials.

The sherpas have asked for $US10,000 ($A10,755.58) to be paid to families of the guides killed in the avalanche as well as those who were injured and cannot resume work.

Sherpas earn between $US3,000 to $US6,000 a season, but their insurance cover is almost always inadequate when accidents happen.

More than 300 people, most of them local guides, have died on the peak since the first ascent by Edmund Hillary and Tenzing Norgay in 1953.

The government has issued permits to 734 people, including 400 guides, for 32 expeditions this season to climb Everest.