Workers at the Tonghua Iron and Steel Group beat to death newly appointed manager Chen Guojun on Friday after he threatened to lay off up to 30,000 people in a controversial restructuring, the China Daily reported.

"I haven't heard of anything comparable to this," said Geoff Crothall, a researcher at the Hong Kong-based China Labour Bulletin.

Chen was killed when about 3,000 workers forced a production shutdown at the plant in northeast China's Jilin province after they heard privately-owned Jianlong Group was taking over Tonghua, the China Daily said.

"Chen disillusioned workers and provoked them by saying most of them would be laid off in three days," the paper quoted a local police officer identified only as Wang as saying.

After severely beating Chen, workers clashed with police and refused to allow medical personnel to attend the badly injured general manager. Chen was declared dead late Friday after finally being taken to hospital.

"I have heard of cases where managers have been recently taken hostage in their offices, but not beaten to death in this manner," said Jean-Philippe Beja, research director at the Hong Kong-based French Centre for Research on Contemporary China.

"As far as I know this is the first time, or in any case the first time it has been reported," he said.

A spokesman with the Jilin provincial government confirmed the killing and the protests when contacted by AFP on Monday, but refused to go into detail.

"The Jilin provincial government has decided to stop the merger plan," the official, who gave the surname Li, said. "The police have launched an investigation into the killing."

Xinhua news agency said the government halted the merger plan "to prevent the situation from expanding", apparently referring to the worker unrest.

"In most privatisations of state-owned enterprises, workers are concerned they are going to get laid off with desultory compensation that will only last a few years," Crothall of the China Labour Bulletin told AFP.

"But what gets them angry is that the whole privatisation process is done under a cloak of secrecy... there is a lack of transparency and rightly or wrongly, workers suspect wholesale corruption and a loss of state assets."

Further fuelling emotions is the fact that most workers, especially middle-aged or older workers, know that it will be difficult to find new jobs, he said.

"The police will obviously have to do their duty and find the culprits... but it will be tricky," Crothall said.

"They realise the situation is very volatile and they don't want to inflame it further."

The Hong Kong-based Information Centre for Human Rights and Democracy said in a statement over the weekend that over 30,000 workers were involved in the protest, while as many as 100 people were injured in clashes with riot police.

The workers had complained about Chen's alleged three-million-yuan (438,000-dollar) salary, as the mill's pensioners received as little as 200 yuan (29 dollars) a month, the statement said.

China sees many large-scale protests each year, often sparked by allegations of government corruption and fuelled by a widening gap between rich and poor.

On June 15 in southern China's Dongguan city, a disgruntled worker at a metals company upset over compensation from a work-related injury slashed to death two Taiwan bosses and seriously injured another company manager.

The murder in Guangdong province was witnessed by over 200 people, the Global Times reported at the time.

State-owned Tonghua Group is the biggest steel maker in Jilin province and produced seven million tonnes of steel last year, the company said on its website.

In 2005, Jianlong sought to take over the company but backtracked last year as steel prices tumbled with the global financial crisis.

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