The demolition of Kampung Mutiara in Batu Ferringhi near here was called off Monday morning on the advice of the police.
Police advised the private landowner not to proceed with the demolition order after 500-odd residents and more than 1,000 supporters formed a human barricade on the road to their village.
They had also parked 12 cars, a van and a large school bus on the two lanes leading to the junction.
The gathered crowd cheered as Umno Bukit Bendera division chairman Datuk Ahmad Ismail stood on a makeshift stage and made the announcement.
"Your homes are safe for now. But the problem is not over yet. All of us will strive to make sure you will not be made homeless," Ahmad said.
With him were leaders from several political parties, including Gerakan and DAP.
Ahmad told the press that lawyer V. Amareson was in the Court of Appeal applying for a stay of execution on the demolition order granted to the landowner.