A mutiny by rank-and-file Bolivian police demanding higher wages spread across the nation on Friday, with an estimated 4,000 officers occupying barracks.

Protesters sacked and set fire to furniture and documents at a police office in downtown La Paz on Friday that processes disciplinary complaints, but the protest otherwise appeared peaceful.

The mutiny began Thursday when about 30 police and their wives seized control of an elite unit's barracks just 100 metres from the presidential palace, ejecting its commanders.

Police joined the protest Friday in major cities including Santa Cruz, Cochabamba and Oruro, according to local media and mutiny leaders.

They were demanding direct talks with President Evo Morales, who was in the palace on Friday, protected by helmeted military police with assault rifles. The leftist leader returned early from a climate summit in Brazil to deal with the predicament but did not immediately comment on it.

"This conflict is the most complicated that Morales has faced and if it's not peacefully resolved it could detonate a political crisis as in the past," said political analyst Carlos Cordero.

2003 mutiny ended in 19 deaths

A similar mutiny in February 2003 ended violently with police engaging the presidential guard in a firefight, and 19 people killed. Eight months later, then-President Gonzalo Sanchez de Lozada fled after bloody anti-government protests.

Commissioned police officers were not participating in the mutiny and the force's chief, Col. Victor Maldonado appealed to protesters to sit down and negotiate.

Bolivia's 28,000 rank-and-file police officers earn an average of $194 a month, a third less than a sergeant in the armed forces.

Interior Minister Carlos Romero told reporters authorities were seeking a way to raise those salaries but noted that the cost of police salaries had doubled in six years to $86 million in 2011.

Morales is Bolivia's first indigenous leader and won re-election by a wide margin in 2010. But his approval rating has dropped to about 43 per cent amid a series of protests over wage demands, rising prices and objections to his support for a jungle highway that would splice a nature preserve.

His relations with Bolivia's better paid and equipped military are better than with the police, which is widely seen as the country's most corrupt institution. It has had seven commanders in the last six years.