Workers at French car parts maker New Fabris, which supplies parts for Renault and PSA Peugeot Citroen, are threatening to blow up their factory unless each of the 366 workers receive £26,000 each.
Employees at the plant, which was declared bankrupt on June 16, are said to have rigged up gas canisters inside a factory workshop which will be detonated on July 31 if the carmakers refuse to pay the workers that are now facing unemployment.
New Fabris holds an estimated €2 million (£1.7m) of stock ordered by PSA Peugeot Citroen and Renault combined, and also has a machine which belongs to Renault which is worth €2m (£1.7m).
Police and the fire brigade have been sent to the factory in Chatellerault, western France.
The French industry minister Christian Estrosi has refused to negotiate with the workers while the threat of detonating the gas canisters remains.
Guy Eyermann, member of the CGT union that appears to be leading the protest, said: “Are we capable of blowing up the factory? Yes we are." Renault and Peugeot insisted yesterday that they would not give in to the threats.