Much of Papua New Guinea's capital has been left without running water and is being plagued by power cuts following a landowner dispute at the nation's main hydro-electric plant.
A group of landowners took control of the Rouna power station on Monday and have reportedly refused a government offer to negotiate their 291 million kina ($A140 million) compensation claim.
The group claimed PNG Power Ltd had not paid any compensation for environmental damage since 1964.
"They have made billions and billions of kina over the years," Rouna landowners chairman Babea Toina told the National newspaper.
"We will not leave until the prime minister meets us and orders the immediate release of 291 million kina."
The government's chief secretary, Manasupe Zurenuoc, has urged the landowners to sit down and talk with officials but says the group have overestimated what they are owed.
"On government records, we owe the people about 340,000 kina," he said.
"They have not followed proper calculation under the law to claim such an amount."
Police have urged the landowners to leave, but assistant commissioner Francis Tokura said he cannot arrest them because a court order for them to leave had not been received.
Mr Tokura said police would maintain a presence in the area to ensure there was no damage to property.
Schools in the capital closed early on Tuesday, with some letting children out at noon.
Restaurants such as the Royal Papua Yacht Club have announced they have a day's supply of water and may be forced to close their doors if the shortages continue.
Social media sites are also reporting some offices have been left without water since Tuesday.
A spokesperson for Port Moresby General Hospital could not be contacted for comment.
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