China's pollution controls have failed to keep pace with economic development, the country's environment minister has admitted as details emerged of another riot sparked by fears of industrial contamination.

In at least the third clash in as many weeks, 2,000 riot police fired tear gas and warning shots during a violent confrontation with anti-pollution protesters near an industrial plant in Quanzhou, Fujian Province.

The demonstrators destroyed cars, threw stones at police and took an official hostage last weekend in an attempt to sabotage a tannery and chemical plant that they blamed for a foul stench and high rates of cancer. Tensions have risen as the smell has worsened, locals said.

According to the local government, the "rioters" badly beat four chemical factory employees, the chief of the nearby Chengping village and at least one policeman during sporadic fighting over the past week.

The authorities said the hostages have been freed and calm has been restored, but locals told the Guardian that at least 100 protestors were still blocking access to the plant.

"Don't believe what the government is saying," a resident named Zhang said by telephone.

Images posted anonymously online showed upturned cars and long ranks of police carrying shields and batons.

On a local government website, the odour problem is blamed on a broken pipe at the Quangang Urban Sewage Plant.

But residents said the facility, built about three years ago, discharged industrial waste that polluted the sea shore and threatened the health and incomes of local people.

"The stench is awful," said a man, who gave only the surname Liu. "Nobody wants to buy our fish. We can't earn money. The fishing boats have been abandoned on the shore."

Calls to government offices in Quanzhou rang unanswered today.

Earlier in the week, the state-run Straits Metropolitan News, blamed "unlawful elements" for the trouble, but it said only 200 protesters were involved.

The clash in Fujian follows recent disturbances in Shaanxi and Hunan provinces, which has led to the arrest of 15 people, say authorities. That unrest had been sparked by the lead poisoning of more than 2,000 children.

The government has acknowledged that it needs to do more to allay environmental health fears.

"Environmental quality is not satisfactory and environmental protection work is arduous," environmental protection minister Zhou Shengxian told the People's Daily.