At least 12 people are believed dead and dozens reported missing after a huge landslide buried many homes in eastern Nepal.

The landslide also destroyed roads and has blocked Sunkoshi river, leading to a dangerous build-up of water that meant thousands of villagers had to seek higher ground.

The landslide struck Sindhupalchowk district, 75 miles east of the capital Kathmandu, at around 2am local time (6pm GMT). It's believed the landslide was triggered by heavy rainfall in the area.

One survivor evacuated by helicopter to a Kathmandu hospital said he believed the death toll may reach 100.

Durga Lal Shrestha told AP: "There are nearly 100 people in the 60 houses in my village and 20 more people in the neighbouring village who were buried by the landslide. All of them are likely dead."

Shrestha said he and his family heard rumbling which sounded like an earthquake. "The walls in my house caved in, but the roof was fine and that is how we were able to survive. When we came out, it was dark and muddy. Everyone was screaming and it was a chaotic situation."

Nepal police spokesman Ganesh Khatri Chhetri said so far 16 people had been rescued but "hundreds of people are missing and at least 40 houses are buried in the landslide".

Army helicopters are dropping explosives onto the 3km lake created by the landslide, amid fears the sudden release of water could inundate villages further down the valley. Police are using loudspeakers to warn locals because telephone and electricity lines are down in the affected area.

"We are worried about a possible disaster that might happen after the explosives unlock the river," Chhetri said. "It could wash away many villages after the blocked river is unlocked."

The Arniko highway between Kathmandu and the Chinese border was closed by the landslide and the government has declared the area a "flood crisis zone".

Landslides are common in Nepal during the monsoon season (June-September). A similar landslide in 2012 killed at least 26 people in northwest Nepal when a landslide blocked the Seti river. When the dam collapsed the flash floods swept through villages downstream.