The protest began yesterday, prompting the deployment of some 1,000 riot police around DMC's main factory in Pupyong, west of Seoul, witnesses said.

At talks last week, the company's Union suggested employees take paid leave rather than be dismissed, but the firm rejected the offer and began mailing dismissal notices to more than 1,700 workers.

Union leaders alleged the firm had secret plans to close down the Pupyong plant and carry out further lay-offs at the other two factories.

The company officials said the protest would be shortlived.

The Pupyong plant has been idle since Monday when the company decided on a three-week shutdown to reduce costs and stocks of unsold cars, while the other factories in Kunsan and Changwon were running normally.

The company has moved key documents out of offices and called in security personnel to protect facilities.

The latest layoffs means cut of total 6,884 employees, a third of its domestic workforce, as part of its restructuring plans.

Daewoo Motor's creditor banks have warned of cutting lifeline loans to the company unless workers accept lay-offs, saying union resistance was blocking the firm's possible acquisition by General Motors Corp.