It did not say how many were involved in the siege, but a posting on a stock exchange online message board said 20,000 farmers rioted on Sunday after Jingxin said it would resume production. The New York Times put the number at 15,000.

Another posting referred to the villagers' activity as an "environmental protection revolution".

"By yesterday evening there were about 30-40 buses carrying armed policemen. They have blocked all the roads," a woman surnamed Shi told Reuters by telephone.

She said people from the village had led the attack on the plant but they backed down after police began making arrests.

Despite a Communist leadership intent on maintaining stability in the world's most populous nation, the standoff was the latest in a string of protests to rock rural China as the government grapples with anger over corruption and a growing gap between rich and poor.

Another riot in the same province in April was also sparked by factory pollution, underscoring the environmental price China is paying for its rapid rise to become the world's seventh-largest economy.

"Following the rapid development of Xinchang's industrial economy, the clustered population in the city and lessening rainfall in Zhejiang, the problem of pollution in the Xinchang River is increasingly severe," Jingxin's statement said.

A statement from police in Shaoxing, which oversees Xinchang, said the plant had been asked to close because of improper handling of chemicals.

A separate statement from the local government said 1,000 tons of the waste would be removed by July 22.

The two statements seemed to back the villager's claims of problems with Jingxin's operations, but they also reflected the government's desire to maintain stability, saying the masses must respect and abide by the law and not spread ungrounded rumours.

An executive in the plant general manager's office confirmed that protests had forced the factory to suspend operations.

The official, who declined to give his name, denied there were thousands of protesters, saying it was only a handful of what he called hooligans upset not over environmental damage but by what he said was the "unequitable social situation".

But the police statement suggested a much more serious protest.

"In recent days, small numbers of people have besieged the plant, blocked the road and highway and undertaken unreasonable activities and some people even went so far as to attack police lines and use stones to attack the factory," it said.

The Jingxin official conceded there had been environmental problems at the factory and added a waste treatment plant due to have been opened in 2002 was still unfinished, probably adding to the farmers' anger.

"We used to not be so careful about environmental protection. It's a historical problem," he said.