Around 50 to 100 houses were completely destroyed and 180 people displaced due to the fire in Meethotamulla in Kolonnawa, said attorney Nuwan Bopage.
Eleven people, including four children, were killed following the Friday incident, officials were quoted as saying by the Daily Mirror.
Over 400 troops were deployed to rescue the slum dwellers adjacent to the 300-foot garbage dump.
The mountain of garbage caught fire and collapsed on dozens of slums as the residents were celebrating the traditional New Year yesterday.
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Police said the true scale of the damage remained unclear.
"A search for survivors is under way," the police said in a statement.
Sri Lanka's parliament was recently warned that 23 million tonnes of garbage at Kolonnawa dump was a serious health hazard. About 800 tonnes of garbage is being added to the dump on a daily basis.
The residents have been carrying out persistent protests to move the dump and place it elsewhere.
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