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By Bappa Majumdar

KOLKATA, India, March 14 (Reuters) - At least 12 villagers were killed in India's West Bengal state on Wednesday after police fired on opponents of a planned industrial park.

Several died in hospital from injuries received when a crude bomb they had prepared exploded prematurely, senior police officer Raj Kanojia said.

It was the worst violence yet over government plans to acquire farm land for a low-tax industrial development area, or Special Economic Zone (SEZ), at Nandigram, 150 km (90 miles) south of Kolkata.

Twenty people had been arrested, Kanojia said, and police had recovered a handful of homemade guns. Another 40 people were injured, including several policemen.

The death toll could rise because many of the wounded were carried away by villagers before police could reach them.

"We were first blinded by the tear gas smoke fired by the police and then we could hear only bullets and people crying in pain," farmer Ahmed Sheikh, 33, told Reuters by phone from a madrasa in Nandigram.

Earlier police said farmers and political activists, many armed with sickles, attacked officers as they tried to enter an area earmarked for the park, forcing police to open fire.

"We will fight till the last drop of our blood but not give up an inch of land to the government," said Abdus Samad, a leader of the majority Muslim community in the area.

Previous clashes over the proposed SEZ since January have killed at least seven, including one policeman, and wounded more than 100.

Politicians criticised the police and the local administration, and West Bengal's Governor Gopal Krishna Gandhi said Wednesday's news filled him "with a sense of cold horror".

Local communist parties which shore up the ruling left coalition in West Bengal said they would be demanding answers from the governing party.

Trinamul Congress, the main opposition party, called a strike for Friday to protest against the killings.

LIGHTNING ROD

Authorities in West Bengal want to set up a chemical industry hub in Nandigram with the support of an Indonesian conglomerate, the Salim Group.

It is one of more than 200 SEZs that the federal government hopes to build in a bid to lure foreign investment and close the gap with China's manufacturing sector.

Major industrial projects in the neighbouring state of Orissa have also been stalled by protesting farmers unwilling to give up their land. Among them is a high-profile $12 billion plant by South Korean steelmaker POSCO Co. Ltd. <005490.KS>, which would be India's largest foreign investment.

Last week at least 50 people were injured near the proposed POSCO site when villagers for and against the project clashed.

The unrest has proved a serious challenge for Prime Minister Manmohan Singh, under pressure to tone down economic reforms amid signs of voter discontent with the ruling Congress party. Most of the more than 230 SEZ proposals have already been put on hold following earlier violence in West Bengal this year. (Additional reporting by Kamil Zaheer in New Delhi)

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