DHAKA: Bangladesh will expand a massive settlement under construction in its southernmost district to house 900,000 Rohingya Muslims, a minister said Thursday, putting it on track to rival the world's largest refugee camps.

Two thousand acres of land in Cox's Bazar district were set aside last month for a new site to house 400,000 Rohingya who had fled ethnic bloodshed in neighbouring Myanmar since late August.

But space has been exhausted as the number of refugees exceeded half a million, putting immense strain on camps along the border that already hosted hundreds of thousands of Rohingya displaced from past violence in Rakhine State.

Mofazzal Hossain Chowdhury Maya, minister for disaster management and relief, said the estimated 8-900,000 refugees would be relocated to the new camp on the fringes of Kutupalong, the largest Rohingya settlement in the area.

"Those who are living in scattered places... would be brought into one place. That's why more land is needed. Slowly all of them will come," he told AFP, adding families were already on the move to the new site.

The settlement being built by the army -- known as the Kutupalong Extension -- would be expanded by 1,000 acres to accommodate the enormous population, Maya said.

He said all refugees living in the 23 camps stretching along the border would be relocated to the new site, and the existing settlements closed. Two have already been shut down, he added.

The project has caused concern among doctors and charities on the ground who fear a disease like cholera could spread quickly through such a congested, overpopulated site.

The refugee crisis -- ignited by violence in Myanmar's westernmost Rakhine State on August 25 -- is the fastest and largest flow of people across a frontier since the Rwandan genocide in 1994.

The International Organisation for Migration (IOM), the lead UN agency handling the humanitarian crisis, says the situation is "slowly spiralling into a catastrophe of biblical proportions".

Charities are struggling to feed and shelter the half a million new refugees who have flooded the camps, where cases of diarrhoea have doubled in the past week due to poor sanitation.

Mark Lowcock, a UN under secretary general for humanitarian affairs, said the world body would be seeking around $430 million to scale up the relief operation for the destitute Rohingya.—AFP