About 100 Malaysian tribespeople were forced to end a three-month blockade of a dam after rising waters threatened to flood their homes in Borneo, activists said Tuesday.

The state-linked Sarawak Energy company began filling the reservoir in late September, a week after some 100 Penan natives from seven villages began a protest on the only road to the remote, $1.3 billion Murum dam in Sarawak state, located in the northwest of Borneo.

"They have no choice, the water is rising fast so they have to get their belongings," Peter Kallang, chairman of the NGO Save Sarawak's Rivers Network, told AFP.

He said their homes were already being flooded before promised resettlement houses had even been completed.

Malaysian police last month arrested eight tribespeople blocking access to a dam which they say will displace them from their lands, amid increasing protests on Borneo island.

The Murum dam is one of a series of hydroelectric facilities planned by the Sarawak government as it pushes economic development in one of Malaysia's poorest states.

The Penans set up the blockade in September to demand 500,000 ringgit ($155,000) for the loss of their land, property and livelihood.

The 944-megawatt dam is expected to flood 245 square kilometres (95 square miles), and cause 1,500 Penan and 80 Kenyah natives to lose their homes.

Sarawak Energy had said relocation of affected natives was set to be completed by year-end and insisted that displaced villagers were being compensated fairly.

An initial sum of 15,000 ringgit per family was reportedly raised to 23,000, with Sarawak's chief minister Abdul Taib Mahmud calling Penan demands "outrageous".

Kallang said the protestors would continue with legal action against authorities despite being forced to abandon their blockade.

The building spree in the resource-rich state along the powerful jungle rivers has been dogged by controversy as activists allege massive corruption, while natives complain it has flooded rainforests and uprooted tens of thousands of people.

Hundreds of Malaysian tribespeople have also blockaded the construction site of the nearby Baram dam.

While Baram is expected to generate 1,200 megawatts of power, activists claim it will flood 400 square kilometres of rainforest (154 square miles) and displace 20,000 tribespeople.

Taib, who has ruled Sarawak for over three decades, has faced mounting accusations of enriching himself and cronies through a stranglehold on the state's economy, charges which he denies.