Orissa government on Wednesday halted the land acquisition process overnight for Posco's Rs 51,000 crore mega steel project near here after facing stiff opposition from villagers.

"The land acquisition and verification work, which began yesterday, was halted today due to opposition from people. We will start it soon after holding talks with villagers," Jagatsinghpur district collector N C Jena told reporters.

Though the administration yesterday carried out land acquisition work and paid compensation to two betel leaf cultivators, the official team was prevented from entering Gada Kujang in the proposed project area during the day as villagers blocked the main link road.

"We could not enter the village as the people blockaded the road," Additional District Magistrate (Paradip) said, adding the administration had planned land acquisition at Bhuyanpal and Noliasahi area in two days.

State agriculture minister Damodar Rout and Ersama- Balikuda MLA Prashant Kumar Muduli, along with the district collector, had rushed to Gada Kujung to speak to villagers.

They held a marathon meeting with the representatives of the pro-project United Action Committee (UAC) for facilitating the land acquisition process.

UAC, the BJD-backed local body supporting the Posco project, is resisting land acquisition by the administration for not informing villagers.

"We oppose the land acquisition process before finalising rehabilitation package. Though the company had announced the package, UAC has rejected it seeking more assistance to the people," UAC leader Tamil Pradhan said.

Civil rights groups have accused the state government of knowingly violating norms under Forest Rights Acts and sought the intervention of Orissa high court chief justice.

"We will launch civil disobedience across the state opposing the government's forceful acquisition of land for the Posco project," Lok Shakti Abhijan leader Prafulla Samantray told reporters in Bhubaneswar.

CPI-backed Posco Pratirodh Sangram Samiti (PPSS) is opposing land acquisition for the project, which requires 4,004 acres.

Orissa government had earlier today said a total of 470 families could face displacement due to the mega plant, which would also require to demolish 1,877 betel vines and 31 prawn ponds located in the three gram panchayat areas of Dhinkia, Gada Kujang and Nuagaon.

"The Rehabilitation & Periphery Development Advisory Committee (RPDAC) had already finalised compensation package for the affected families," state Revenue and Disaster Management Minister Suryanarayan Patra informed the Assembly during the day.

The project by the South Korean steel giant has failed to take off for five years due to opposition by local people.

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Centre sets up panel to probe charges against Posco

In further trouble for South Korean giant Posco, the Centre today set up a four-member panel to probe alleged forest rights violations at the multinational's proposed steel plant in Jagatsinghpur in Orissa.

"We have constituted a fact-finding team headed by former Environment Secretary Meena Gupta to probe the violation of the tribal rights under the Forest Rights Act at the project site," Environment Minister Jairam Ramesh said.

The South Korean steel major's trouble started soon after it was given approval for diversion of 1,253 hectares of forest land for setting up a USD 12-billion integrated iron and steel plant along with a captive power plant near Paradip the state.

It has been facing land acquisition problem with allegations of violations of rights of tribals who owns the land there.

The panel was formed after the Ministry took a serious note of the Orissa Government's "casual approach" to its direction to supply a compliance report drafted in Oriya in translated versions in Hindi and English language.

Giving the sequence of the matter, a senior Environment official said that on January 8, the ministry had informed the state government that no forest land should be handed over to the user agency (Posco) before the settlement of the tribal rights under the provision of Forest Rights Act.

"But we got a lot of complaints from elected representatives and NGOs against the compliance report which was put on the website of the ministry. But despite repeated reminders, the state authorities are yet to provide us the translated version of the report," the official said.

The team comprising Uma Pingle, V Suresh, an advocate for human rights and Devendra Pandey, an IFS official, has been asked to submit its report within two months, he added.