Thousands of panic-stricken villagers fled their homes fearing flash floods after an overnight landslide blocked a river in quake-hit Nepal's mountainous northwest, officials said Sunday.

The landslide at around midnight sent mud and rocks tumbling into the Kali Gandaki river in Myagdi district, causing water levels to rise by 150 metres (490 feet), said local official Yam Bahadur Chokhal.

"We have evacuated about 100 people from the affected area. People in other villages don't need immediate rescue but thousands have left on their own," Chokhal told AFP.

As fresh landslides dumped debris into the river during the day, the two-kilometre-long artificial lake created by the blockage began to overflow the newly created dam, home ministry spokesman Laxmi Prasad Dhakal told AFP.

"The artificial lake has begun to overflow the dam... but there does not appear to be any risk of flooding," Dhakal said.

An army helicopter carrying soldiers and geologists had reached the site earlier in the day and officials were monitoring the water flow closely, Dhakal said.

"Once the soft soil flows away with the water, security forces might blast holes into the hard rocks blocking the river but we have to be very careful to ensure that there is no sudden surge," he said.

The region has witnessed several small landslides in recent days, said local official Trivikram Sharma, based in the district headquarters of Beni 185 kilometres (115 miles) west of Kathmandu.

"After the two quakes, villagers have reported several minor landslides and late last night they said the hill just came down," Sharma said.

"We cannot immediately assess the risk of flash floods but people are obviously scared that the artificial dam will burst suddenly and submerge their homes."

No one was hurt in the landslide, according to officials.

But police have issued an alert for villagers living along the river, which begins near the Nepal-China border and flows into northern India, eventually joining the Ganges.

The snow-fed waters are also the site of Nepal's largest hydroelectric project that generates 144 megawatts of power, located south of the landslide-blocked area.

Twin quakes have devastated Nepal in recent weeks, killing more than 8,600 people and leaving thousands in desperate need of food, clean water and shelter.