There are many legends associated with this temple. After installing the Lingam Parasurama built a temple here but was destroyed by flood. Lord Shiva told him that no temple structure will exist at that place because He does not want a temple structure for protecting the Lingam. Another legend goes like this. The Bhuthaganas of Lord Shiva worshipped the Lingam every night. They decided to construct a temple there.
But Lord Shiva told them that they must complete the temple in a single night. Bhuthaganas agreed and started the construction. When the foundation was completed, Lord Vishnu came there, disguised as a cock and crowed to mislead the Bhuthaganas. The Bhuthaganas, fearing that dawn had approached, left the work unfinished. Sri Rama, during his search for Sitha, performed tharpana for Jadayu here.
Another legend is associated with Vilwamangalam Swamiyar. One day he visited this place and realised the presence of Lord Shiva and identified the Shiva Linga installed by Parasurama. He started worshipping the Linga and Lord Mahadeva appeared infront of him and told him to start poojas there. Pottayil Ilayathu, Thottathil Nambiar and Idamana Nampoothiri made proper arrangements for Shiva Pooja and Vilwamngalam started the pooja.
But there were no vessels to offer Nivedyam. So Vilwamangalam used a Kavungin Pala (aracanut leaf) to offer Nivedyam. Even today the nivedyam is offered in Kavungin Pala and is called Palanivedyam. Later Vilwamangalam and his associates - Ilayathu, Nambiar and Nampoothiri - constructed a temple but it was destroyed by flood in AD 1343. During the monsoon season the whole region gets flooded and the Shivalinga gets submerged in water.
So the Ooranma Nampoothiris were decided to construct a small temple on the bank of the river inorder to perform poojas during monsoon season. This temple is called Bala Kshetram. It is a fact that though unfinished in nature, this temple has withstood many a flood and still stands as an enigma to the architects, regarding its foundation and structure.
The Travancore Devaswom Board authorities constructed a temple structure here some years ago. but the Deva Prasna conducted later revealed that constructon of the temple structure is against Lord Shiva's wish.