The protesters sought the intervention of the Central and state governments to prevent Kerala from going ahead with its move, police said.
The dams would prevent water flow to three districts of Coimbatore, Tirupur and Erode in Tamil Nadu, affecting irrigation in three lakh hectares, the protesters claimed.
Nearly 240 workers were arrested here while around 200 in Tirupur, police said.
Meanwhile, nearly 2,000 activists, belonging to DMK, Congress, TMC, farmers' associations and NGOs, were arrested at K G Chavadi when they staged a demonstration blocking Tamil Nadu-Kerala border on the same issue, police said.
CPI Secretary M Mutharasan, who led the rail roko protest, said the Left Parties were ready to meet Kerala Chief Minister Pinarayi Vijayan, heading the CPI-M-led LDF government, again and prevail upon him to stop the construction so that the cordial relationship between the two states.
They also demanded that the Centre immediately constitute the Cauvery Management Board and release adequate compensation to farmers, who were suffering from acute water shortage due to drought.
Mutharasan told reporters that the Left parties had already met Vijayan on the issue and if necessary would again meet him.
Besides, the agricultural labourers, who were 'deprived' of works under Rural Employement Guarantee Scheme, also should be paid Rs.25,000 as compensation, he said.
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