THE wife and two young sons of a Philippine tribal leader who is wanted for attacks on a $5.9-billion mine project were killed during an army raid on his hideout, the military said on Friday.

Seven soldiers engaged in a shoot-out with the tribal leader and his armed followers on Thursday at a mountain hut, unaware that the man's family was with him, said military spokesman Lt. Col. Lyndon Paniza.

"They [the soldiers] are under investigation for possible lapses in the rules of engagement," Paniza told reporters.

Paniza said that the tribal leader, Daguil Capion, and his followers escaped.

However, the man's wife and two sons were found dead in the hut, while his daughter was found alive but suffering from a shotgun wound to one of her ears, according to an army statement.

The military did not give the victims' ages, but one of Capion's supporters told Agence France-Presse that the dead sons were eight and 13, while the injured daughter was seven.

Capion is a well-known opponent of the enormous Tampakan copper and gold project on the southern island of Mindanao, which is run by Swiss mining giant Xstrata and Australia's Indophil Resources NL.

Capion is wanted for an ambush in March last year that killed three employees of a Tampakan mine contractor, and the soldiers were sent to arrest Capion, according to an army statement.

Capion's hideout was inside the Tampakan project site, according to an anti-mining coalition that includes the Catholic church, environmentalists and community organisations.

Jesus Garganera, national coordinator of the Alyansa Tigil Mina (Stop Mining Alliance), told Agence France-Presse Capion was a senior leader of one of five B'laan communities whose ancestral lands were within the Xstrata project site.

"He's a warrior leader who has been designated by his tribe to implement a defence of their ancestral domains," Garganera said.

"We strongly condemn this barbaric and treacherous act of the military against Daguil and his family."

Sagittarius Mines Inc. has invested hundreds of millions of dollars into the project, which would be one of the biggest copper and gold mines in Southeast Asia if it becomes operational.

The mine is due to open in 2016 but preparatory work has been delayed by a local government ban on a planned giant open pit.