The mud volcano began flowing out of the the Banjar Panji-1 exploration well in May 2006, in which Santos was a partner, and has since inundated more than 600 hectares, swamping several villages and displacing more than 16,000 people.

The newly affected area is about 20km from Surabaya, Indonesia's second-largest city.

"At least 10 vehicles were buried by 1 metre deep mud, including mine," the Antara news agency quoted local traffic police chief Andi Yudianto as saying.

Ahmad Zulkarnain, a spokesman for a government body managing the mudflow, said the group had been unable to reinforce the 10m thick and 5m high dyke built to contain the mudflow because there had been no agreement on compensation with the owner of the land where the defences are situated.

"We had been worrying about this for some time. It is vulnerable, especially during the rainy season," he told Reuters.

The mud flow has already smothered nine villages, covering thousands of houses, factories, mosques and paddy fields, displacing 15,000 people and forcing dozens of businesses to close.

The well's operator, Lapindo Brantas, is owned by the family of Indonesia's Social Welfare Minister Aburizal Bakrie, and has since been ordered by the Indonesian Government to pay 3.8 trillion rupiah ($US403 million) in compensation to the victims and to cover the damage.

The company has disputed findings that the disaster was caused by the drilling, and also whether it should foot the cost of managing the disaster by itself.