BEIJING, CHINA - Chinese authorities have scrapped the takeover of a steel plant where workers killed a manager in fury at threatened job cuts, an official and state media said Monday.

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.

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

'Chen disillusioned workers and provoked them by saying most of them would be laid off in three days,' the China Daily 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.

A spokesman with the Jilin provincial government surnamed Li 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,' 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.

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.

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.

In one of the most highly publicised recent incidents, ethnic unrest on July 5 in Urumqi, capital of China's northwest Xinjiang region, left 197 people dead and more than 1,600 people injured.