Amid stiff resistance to Posco steel project, Orissa government on Tuesday said talks were on with agitators to resolve the issue as work at proposed plant site near Paradip was stalled for the third consecutive day due to a road blockade at a key junction.

"The district administration of Jagatsinghpur is holding talks with villagers in the proposed Posco plant area to convince them about benefits of the project," chief secretary B K Patnaik told reporters here.

To a query, he said there is no proposal at present for discussion at the chief minister's level as talks are being held between the district administration and locals on a regular basis to resolve the issue.

Talks with protesters assumed significance as work at the proposed Posco site in Jagatsinghpur district was stalled for the third day with locals staging a road blockade at a key junction pressing for their demands including enhanced compensation to land losers.

"People have blocked the road near Balisahi making it difficult for our teams to proceed for boundary wall and rehabilitation colony construction," Basudev Prodhan, Tahasildar of Kujang said.

Balisahi junction is the place from where roads lead to Nuagaon and Dhinkia panchayts in the proposed site for Rs 52,000 crore Posco steel project near Paradip.

Due to the road blockade, armed police were unable to proceed and are now staying near Mahabirpeetha of Nuagaon, about four kilometre from Balisahi, sources said.

Protesting against felling of trees near Noliasahi- Polang area, slogan-shouting United Action Committee (UAC) activists squatted on the road.

Construction work for boundary wall and rehabilitation colony and felling of trees in Noliasahi-Polang area, where the district administration claims to have acquired about 1800 acre of land, was affected due to road blockade by villagers and absence of armed police.

Though UAC happens to be a pro-project outfit, its activists and others in the area have been disrupting work saying the government was yet to meet their six-point charter of demands including proper rehabilitation of displaced people, enhanced compensation to land losers and job to one member from every affected family.

Police were also unable to reach Dhinkia-Gobindpur area where anti-Posco activists under the banner of Posco Pratirodh Sangram Samiti (PPSS) have been sitting on dharna.

Meanwhile, a Congress delegation visited the area and expressed solidarity with the villagers facing displacement due to the project.

Accusing the Orissa government of using force in order to acquire land and erect boundary wall in the area, the Congress leaders said the mega industry should never be allowed in the fertile land by snatching away the livelihood of so many villagers.