A two-year-old agitation by farmers in West Bengal in India against a Tata Motors factory, set to produce the world's cheapest car, ended Sunday night after a land-for-land agreement reached between the state's Left Front government and Trinamool Congress leader Mamata Banerjee.

A standoff over land acquired by the government, which was given to Tata Motors had forced India's top vehicle maker to suspend work late last week at the site where it planned to build the Nano, billed as the world's cheapest car at 2,500 dollars.

Governor Gopal Krishna Gandhi, who brokered the settlement between the state gov-ernment and Trinamool Congress after three days of tortuous negotiations, said land would be given to those whose land was acquired for the car plant in Singur, near Kolkata.

There was no immediate reaction from the Tata which had rejected a compromise on the land holding pattern for its $315 million project.

"The government has taken the decision to respond to the demand of those farmers who have not received compensation," Gopalkrishna Gandhi said after the first face-to-face meeting with Chief Minister Buddhadeb Bhattacharjee and Mamata Banerjee.

Trouble began after the government took over 1,000 acres of farmland for the factorylastyear.

The government offered compensation but some farmers rejected it, demanding that at least 400 acres of land be given back to them.

Trinamool chief Mamata Banerjee said she was suspending her protests since the government has agreed to stop construction of ancillary units on land belonged to unwilling farmers.

"We will get land back within the project... this is our victory," said Banerjee who has been leading the farmers' campaign for return of their land.