The surprise swoop comes after in-fighting that has gripped the ruling Union Solidarity and Development Party (USDP) before November polls -- billed as the freest and fairest for decades in the former-junta ruled nation.
With a full picture yet to emerge as senior government figures remained in talks, USDP sources suggested the position of party leader -- and parliament speaker -- Shwe Mann was under threat.
"Police entered the party compound last night. Since then no one was allowed in or out," Toe Naing Mann, Shwe Mann's son, told AFP Thursday morning.
He added that "so-called guards" were also at his father's residence in the capital Naypyidaw.
"It is strange that armed forces have restricted a political party in this way," he added, saying he was monitoring the situation through contacts from Yangon.
About half a dozen police were at the gate of the party's vast headquarters early Thursday, according to an AFP reporter at the scene.
Dozens of private cars were seen at the USDP compound where high level talks are apparently taking place.
The deployment of police comes a day before the deadline for candidates to register to contest the upcoming polls, amid signs Shwe Mann was reluctant to support candidates loyal to the president.
Political tensions are seething ahead of the November 8 polls.
They are set to be contested by opposition leader Aung San Suu Kyi, who was a thorn in the side of the previous junta regime with her years of campaigns for democracy.
Shwe Mann has publicly welcomed the idea of working closely with Suu Kyi, whose party is expected to make strong gains at the looming polls.
He has also set himself up in opposition to the still-powerful army on key issues -- including on constitutional reform debates that centre on reducing the military's political power.
- Unexpected move -
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With the political play still unfolding, it was not immediately clear what the outcome of the swoop would be.
A USDP source, who requested anonymity due to the sensitivity of the information and because he was not in Naypyidaw at the time, told AFP that he understood around 100 police sealed off the gates to the headquarters on Wednesday evening.
He said he believed the plan was to remove Shwe Mann as party leader and impose "a new party structure".
"We did not expect this. There were some disagreement inside the party, but that's all. This is not good -- both for the party and also for the country's future," the source added.
Government spokesman Ye Htut, who is not a USDP member, said he believed that meetings were being held to "reform party leadership", but could not confirm if Shwe Mann had been detained.
Recent months have seen rumours abound of animosity between Shwe Mann and President Thein Sein, both former generals who shed their uniforms to take part in controversial 2010 polls.
Those elections brought a new quasi-civilian government which has ushered in sweeping reforms.
The USDP has been the vehicle for the former junta elites to metamorphose from soldiers to MPs.
On Wednesday, senior USDP member Aung Ko told AFP that the party had received "more than a hundred" applications from recently retired military officers and cabinet ministers looking to stand in the elections for the party.
A source close to Suu Kyi confirmed she had cancelled a planned weekend trip.