Tata Nano production on hold

* Factory needs to be relocated * Farmers protest at land seizures * Production could be delayed by 12 months...

Tata Nano production on hold

The future of the Tata Nano, which was set to become the world's cheapest car, is in doubt.

Production of the 1250 car, which was set to go on sale in India in 2010, has been suspended after a dispute over land rights at the site where it was due to be built.

Construction workers at the site in Singur, India have been besieged for two weeks by activists who claim poor farmers have been forcibly evicted from the area.

In a statement, Tata said: 'The company is evaluating alternate options for manufacturing the Nano car at other company facilities and a detailed plan to relocate the plant and machinery to an alternate site is under preparation.'

The car was originally scheduled for launch next month, but relocation would delay that for at least a year.

With raw material costs having risen 23% since the Nano was announced, doubts have also been raised that Tata will be able to sell the car for its originally mooted price.