Myanmar will drop charges against dozens of ethnic minority protesters who demonstrated against a statue of independence hero General Aung San and will hold talks with them, state media said yesterday, offering a rare concession.

The surprise climbdown comes as Aung San Suu Kyi, leader of the ruling National League for Democracy and the general's daughter, faces rising dissatisfaction in ethnic minority areas ahead of elections set for next year.

On Tuesday, police fired rubber bullets, tear gas and water cannon to disperse the crowd of 3,000 protesters in Loikaw, capital of the eastern state of Kayah, also known as Karenni.

Aung San brokered a 1947 pact among some of Myanmar's ethnic groups that is marked by an annual holiday on February 12, but the Karenni protesters say its promises were not implemented after the general's assassination that year.

On Wednesday, the official Global New Light of Myanmar newspaper said state officials had negotiated with protesters the previous day and agreed to revoke the charges against them.

In turn, the activists agreed to suspend their protests, it said, adding negotiations would take place within a month, covering issues such as an inscription on the statue's pedestal.

The statue may be moved from its prominent position in a Loikaw park, the paper added.

"The protest group dispersed after we got that agreement," said Khun Thomas, one of the Loikaw protest leaders.

He said the activists expected the charges of unlawful assembly, incitement and defamation filed against more than 50 people to be formally dropped when they went to court on Wednesday.

Officials unveiled the statue in Loikaw this month, triggering the latest in a spate of protests begun when plans for the monument were first announced in mid-2018.

Ethnic minority activists pushing for a federal system of government in Myanmar oppose the statue and other monuments to a leader from the country's Burman majority.

On taking power in 2016, Suu Kyi set her top priority as securing peace with ethnic armed groups, but progress has been slow.