Construction of a factory to build the "world's cheapest car" is still stuck in neutral as Tata addresses concerns about a deal to end violent protests at the plant.

The Marxist government of West Bengal state announced an agreement on Sunday to halt the demonstrations over farmland seized to build the Nano factory.

But Tata refused to resume construction immediately, arguing that the accord lacked clarity and asking for firm pledges that it would be allowed to operate smoothly.

A four-man committee set up by the state government to resolve the dispute met for the first time yesterday (September 9) in a bid to keep the deal alive.

State industry minister Nirupam Sen said the talks had ended on a "positive note" and added that the committee members would visit the site of the plant on Wednesday.

Tata Group chairman Ratan Tata warned last month he would abandon the plant unless his workers' safety could be assured, even though the company has already poured the equivalent of R2.8-billion into the project.

The deal announced on Sunday followed three days of talks between the protesters and the state government in Calcutta and included a pledge to return some of the land earmarked for the factory's ancillary units.

Tata has insisted on protecting the integral nature of the plant, arguing that any move to shift the units - mainly component suppliers - from the existing site would affect the tightly managed supply chain and drive up costs.

In a letter delivered on September 9 Tata managing director Ravi Kant noted "clarifications" by the state government that such protection would be forthcoming.

He wrote: "We would like to be told also about any future understanding, commitment or agreement which may go contrary to this arrangement."

Protests against the plant have been going on for two years but have intensified in recent weeks with demonstrators besieging the factory and threatening to kill workers.

Opposition has been spearheaded by West Bengal's Trinamool Congress party, which had been pushing for land expropriated for the plant to be returned to evicted farmers.

All work on the factory was halted more than a week ago when protesters barred workers from entering the plant.

The dispute reflects a wider conflict between farmers and industry over land rights across the nation.

On one side are many farmers who say they will starve without their land while business and government say India must industrialise to create jobs for its army of young people. - AFP