Myanmar opposition leader Aung San Suu Kyi urged protesters Wednesday to accept a controversial Chinese-backed mine that was the scene of a violent crackdown last year, or risk hurting the economy.

The Nobel laureate dismayed some villagers living near the copper mine in Monywa, northern Myanmar, with her warning that nearby communities and the wider economy would suffer if the controversial project is abandoned.

"If we stop this project, it will not benefit local people or the country," Suu Kyi said during a visit to the area.

"The other country (China) might think that our country cannot be trusted on the economy," she added. "We have to get along with the neighbouring country whether we like it or not."

Speaking to about 500 people at a second village, Suu Kyi urged those unhappy with her to "protest at my house".

The issue has left Suu Kyi with the awkward balancing act of reaching out to downtrodden local people while fulfilling her new role as a parliamentarian.

She failed to appease the villagers and many spoke disparagingly about her lack of support for their action, in particular after November's brutal crackdown, which carried echoes of the former junta's response to dissent.

"We have lost respect for Daw (Aunt) Suu... although we used to love her very much," villager Zaw Naing told AFP, accusing the opposition leader of failing "to consider local people".

An estimated 3,000 protesters -- some carrying placards reading "Get out Wanbao" -- on Wednesday marched on the headquarters of the Chinese firm which jointly owns the mine.

A parliamentary report overseen by Suu Kyi -- released on Tuesday -- said police used phosphorus against demonstrators at the mine in November in the harshest crackdown on protesters since the end of military rule.

However, the probe into the clampdown, which left dozens wounded including monks, recommended the mine project should not be scrapped, despite conceding it only brought "slight" benefits to the nation.

The report was angrily rejected by locals who are worried about the environmental impact and land grabbing.

"We cannot accept the result of the investigation... this Wanbao company has to close down," Zaw Naing told AFP, vowing further protests.

Another local man, Sai Kyaw Aye, said his fury was directed at the report and not Suu Kyi -- although he accused her of making a "mistake" by failing to consult ordinary people.

Since decades of brutal junta rule ended two years ago, Myanmar has seen protests against land grabbing as disgruntled rural people test the boundaries of their freedom to demonstrate under a reform-minded government.

Chinese-backed projects to tap the nation's abundant natural resources have sparked particular resentment.

The Monywa mine dispute echoes fierce opposition to a Chinese-backed mega-dam that was suspended in September 2011 after a public outcry.

Many local residents want the mine -- a joint venture between Chinese firm Wanbao and military-owned Myanmar Economic Holding -- to be shut down and several villages have opened protest camps nearby.