Tata may have to abandon the nearly-completed factory that was meant to build the Nano in the face of continued demonstrations over alleged land seizures.
The firm said today that it has had to "suspend the construction and commissioning work at the Nano Plant in Singur in view of continued confrontation and agitation at the site."
It is looking at moving the entire operation to another location. "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," Tata said in a statement.
Last week the factory was besieged by mobs demanding the return of 400 acres of land, which they claim was illegally seized by local government for the factory.
Should Tata decide to leave Singur, it will be a major blow to the Nano, which was meant to be going into production next month. The firm has already had to contend with rising materials prices that have threatened the car's proposed £1250 price tag.