About 5,000 Daewoo workers were rallying in front of Seoul's main railway station in the early afternoon.

"Withdraw the `big deal' which does not guarantee workers' survival," Daewoo workers chanted at the station square, across the street from the group's headquarters.

About 10 labour leaders scuffled with Daewoo securityguards as they tried to enter the headquarters building in an effort to meet with Daewoo Group head Kim Woo-choong. It was unclear whether they were allowed to meet any Daewoo officials.

South Korea's government has been seeking to achieve so-called "big deals" as part its drive to push the country's big business groups into reducing their debts and becoming more focused on core business lines.

All operations at Daewoo Electronics, including those of Daewoo's suppliers, would be halted for at least one day for the rally, a company spokesman said.

The Daewoo rally is the largest labour protest since South Korea announced its blue-print for corporate structural reform on Monday, following an agreement between the government and the conglomerates, or chaebol.

Analysts and economists estimate the series of mergers, liquidations and swaps could throw between 30,000 and 100,000 people out of work.

At the centrepiece of the agreement stood a deal between Samsung and Daewoo groups to swap Daewoo Electronics for Samsung's fledgling automaking unit.

Workers of Samsung Motors protested in smaller rallies earlier in the week.

Daewoo workers said they were concerned about the likelihood of mass layoffs following the swap.

"No one believes the agreement that jobs would be retained," said Kim Do-hui, a Daewoo Electronic finance department worker.

"I cannot understand how (the government) can allow (the conglomerates) to swap a profitable and bright company for a debt-laden one which should have been closed down," Kim said. "It is totally unacceptable".

Daewoo Electronics has posted six straight years of profit with debts of 3.7 trillion won at end-June against assets of 4.8 trillion won while Samsung's infant motor business, which began producing cars only nine months ago, has accumulated some 3.6 trillion in debt against assets of 4.3 trillion won.

The labour ministry said on Friday that the number of unemployed stood at about 1.5 million. The most recent official statistics put the jobless total at 1.54 million at end-October.

The ministry said the unemployment rate would "hold steady" at about five per cent, or 1.0 million to 1.2 million unemployed, from 1999 to 2001, when unemployment measures were implemented.

Unemployment has soared since South Korea plunged into an economic crisis last year. Overcompetition among the chaebol to gain sheer size has been blamed as one reason for humbling what was once the world's 11th largest economy.

On Tuesday, Daewoo and Samsung said they agreed to set up a five-member committee to evaluate assets and debts of the two firms to facilitate their exchange of business units.

The two groups are scheduled to submit plans to implement the swap to the government by December 15.