Bhubaneswar, June 21 (IANS) The Orissa government Tuesday halted land acquisition for Posco's $12 billion project in Jagatsinghpur due to opposition from locals, an official said.

"We have halted it indefinitely following the instruction from the government. We will wait for further instruction on the matter," Additional District Magistrate S.K. Chaudhuri told IANS.

He, however, said work at the land already acquired will continue.

"The work such as land development, cutting of trees is going on at the acquired land," Chaudhuri said.

The local administration has claimed to have acquired nearly half of the 4004 acres needed for the steel project in the Jagatsinghpur district, but officials have not been able to enter the troubled Dhinkia and Govindpur area to acquire the remaining land due to strong opposition.

The villagers, including hundreds of women and children, have formed a human barricade in the area since the past one week to prevent the officials from entering the area.

Chaudhuri said the administration is likely to take appropriate action soon against villagers who have been "misusing" children.

More then 400 children have skipped schools and joined their parents in the protest against the company for over a week to prevent acquisition of their homestead and farm land.

Posco's proposed 12 million tonnes steel plant - the largest foreign investment in India - is to come up near the port town of Paradip, about 120 km from here.

At least 2,900 acres of the total land required for the project is forest land. Authorities said villagers have encroached upon the forest land illegally and they need to be vacated.

Protesters said they have been holding the land for generations. They claim that once the land is acquired, they will lose their agro-based sustainable livelihood.