Tata Motors, which is setting up the plant to roll out the US$2 380 Nano, has faced violent protests and political opposition over the acquisition of farmland in Singur, an hour's drive from Kolkata.

"I just cannot give back the land," West Bengal Chief Minister Buddhadeb Bhattacharjee said in Kolkata.

"Giving back 400 acres is dropping the project, I cannot afford to do that," Bhattacharjee said, referring to demands made by farmers and opposition parties to return land.

The trouble began after the government took over 1 000 acres of farmland for the factory.

The government offered compensation, but some farmers with smaller land holdings have refused compensation, demanding that land be given back to them.

The protests reflect a larger standoff between industry in India and farmers unwilling to part with land in a country where two-thirds of the billion-plus population depend on agriculture.

Mamata Banerjee, leader of the opposition Trinamool Congress which is spearheading the protests, threatened to stage a state-wide campaign.

"We will start a state-wide agitation now against the project, unless the land is returned to the farmers," Banerjee told reporters in Singur.

Last week, Tata Motors chairman Ratan Tata said he was prepared to move the plant from Singur despite having invested US$350 million in the project.

At the weekend thousands of farmers and opposition activists protested outside the plant, the latest in demonstrations that have often ended in clashes with police.

Bhattacharjee said he was hopeful he could convince Trinamool Congress to end their agitation.

"I am trying my best ...

I am an optimist.

I still believe I can convince the opposition.

I believe we should reach a consensus," he said.

Nampa-Reuters

Marketplace News Headlines Of The Last 48 Hours

•  Financial meltdown knocks global factories
•  Tensions brew over EU's vetting of state aid to banks
•  DBN assistance paves way for women
•  China urges developed states to take lead in climate change
•  Bridgestone puts on the brakes at US plant Japanese firm will cut jobs and stop making tyres
•  Price transparency for Nam's telecoms sector
•  Consumer debt affects health
•  The mantra of the big guns and the cries of the back streets
•  SA mining unions call for halt to new lay-offs
•  Polytechnic receives financial boost
•  Nam moves to get ban on exports to SA lifted
•  BEE firms in SA must bail themselves out, say black managers
•  Maputo remains optimistic about foreign aid flows
•  US$500m biofuels project wants Mozambican labour to produce ethanol
•  Union asks leaders not to back down on aid for decent work
•  House market will worsen in South Africa, says Absa
•  Fortescue shares surge on bid rumours by BHP and China
•   Chinese manufacturing drops sharply
•  Ryanair makes new takeover bid for Aer Lingus