India's Tata motors, the creators of the world's cheapest car, has reached an agreement with protesters at its factory in India's east.

The plant in Singur is 90 per cent complete but demonstrators had stopped construction to protest what they describe as the forced eviction of local farmers.

West Bengal state's opposition Trinamool Congress party, which has been spearheading opposition to the plant, says it has reached a deal with the state government that would see some of the land for the nearly-complete factory returned to displaced farmers.

Other farmers will receive compensation.

Tata Group, hoping to launch the two and a half thousand US dollar 'Nano' next month, warned last week the plant would be moved out of West Bengal if the demonstrations continued.

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