A leading toy producer in South China's Guangdong province has agreed to renew its labor contracts with some senior employees following a violent protest by employees on Tuesday, an official said yesterday.

The board of directors of the Hong Kong-funded Kaida toy factory in the Zhongtang township in Dongguan city has also agreed to, in accordance with the law, offer a new plan about giving economic compensation and bonuses to the employees whose contracts were terminated, said Li Zhihui, head of the township.

On Tuesday evening, more than 500 workers went on a rampage, attacking police vehicles and the company's offices, police and witnesses said.

Most of the workers had been told by the employer that their contracts would be terminated, and they would receive an average of one month's wages as compensation.

"That would be less than 1,000 yuan ($143) for most us," a worker was quoted by the Xinhua News Agency as saying.

He said about 80 workers had been employed by the company for nearly 10 years, and were therefore unhappy with the compensation.

"They rallied at the company's gate late on Tuesday afternoon and were soon joined by others," a witness said, on condition of anonymity.

About 1,000 police and security guards were called in to disperse the crowd. This infuriated the protesters, who overturned a police car, smashed at least four police motorcycles, and broke windows and damaged computers in the company's office building, said the witness and a spokesman with the township public security bureau.

Other witnesses said at least five workers were injured. This could not be confirmed by the police.

The workers claimed the company, which produces toys for several major international brands, was trying to evade its obligations under China's labor contract law, which came into effect early this year.

Liu Xiyuan from Hunan province, who has worked at Kaida for 21 years, said he turned down compensation equivalent to eight months' wages when his contract expired on November 19.

"If I had accepted the compensation, it would have meant all my 21 years of work would not have amounted to much," Liu said.

Kaida, which employs 8,000 people, terminated contracts with 380 workers on Nov 19.

A further 216 contracts were scheduled to be terminated yesterday.

"Five people were injured during the incident, all were employees of the factory. Three were discharged after hospital treatment, and two were admitted for further observation," a publicity official surnamed Liu of the Zhongtang town government, told China Daily.

"The city's public security bureau is also investigating the attack on police vehicles," he said.