Work on a plant in eastern India to build Tata's Nano stopped completely on Friday after thousands of employees failed to turn up for work following protests by farmers angry at the land being turned over to the automaker.

Some compensation has been paid but the farmers want 400 acres back. The state government has said returning this portion of land destined for the likes of suppliers would make the entire plant project unviable.

This week, there have been violent protests and political opposition over the farmland in Singur, about an hour from state capital Kolkata (once Calcutta).

More than 3,600 employees were escorted by the police out of the factory on Thursday after political activists and farmers threatened to assault them if they returned, officials told the Reuters news agency.

"Our workers are not working today," a Tata Motors spokesperson said. "We are assessing the situation as of now."

Last week, Tata Motors chairman Ratan Tata threatened to move the plant from Singur if violence continued, despite having invested US$350m in the project.

Mamata Banerjee, leader of the opposition Trinamool Congress, which is spearheading the protests, had threatened to carry out road blockades on Friday to protest against the factory.

Tata Motors has been flooded with offers from other states to host the Nano plant instead, the report said.