Jakarta - Dozens of Indonesian victims of an industrial accident sought refuge inside the Dutch embassy in Jakarta Wednesday, as hundreds of others rallied outside the presidential palace to demand speedier compensation for their properties.

About 70 victims set up camp outside the embassy, claiming that they have no other place to live since a mud volcano buried their homes in 2006.

"We have repeatedly held a dialogue with the government, but there was lack of seriousness to resolve the problems," protest coordinator Sumitro told Kompas. com online news portal. "We will continue waiting here, despite the rain and heat."

They came from several villages in the East Java district of Sidoardjo, about 600 kilometres east of Jakarta, where a firm drilling a gas well hit an underground mud volcano in May 2006. The oozing sludge spread uncontrollably to bury homes, factories, railway tracks and roads.

More than 50,000 people living in 12 villages were displaced.

The company, PT Lapindo Brantas, is controlled by the family of business tycoon and politician Aburizal Bakrie, who is the current welfare minister. It was accused of not installing mandatory safety casings in the lower section of the drill hole, which could have prevented the mud from escaping to the surface.

President Susilo Bambang Yudhoyono called on Nirwan Bakrie, the minister's younger brother, to pay the outstanding restitution to the victims.

"The president ordered the process of payment on compensation be immediately completed," presidential spokesman Andi Malarangeng said after a meeting on the issue Wednesday.

Yudhoyono in 2007 ordered Lapindo to pay 20 per cent of the compensation immediately, with the remaining 80 per cent due by November this year, but the company reneged.

In September, Vice President Jusuf Kalla said the government had given up all hope to stop the mud. Various attempts to halt the mud flow were made, included building a network of dams, channeling some of the mud into the sea, dropping huge concrete balls into the crater, but all failed.

The company argued that the initial mud blowout was a "natural disaster" triggered by an earthquake in Central Java two days before, a claim discounted by international geologists. (dpa)