'Posco will not move to any other location as the reports suggest. It will be set up in the proposed site,' Patnaik told reporters in New Delhi.

Posco, one of the world's biggest steel makers, signed a deal with the state government in June 2005 to set up the plant near the port town of Paradeep in the coastal district of Jagatsinghpur, some 100 km from here by 2016.

There has been no significant progress on the project, the largest foreign direct investment in India, since then due to local opposition.

Over 20,000 people from around 15 villages, including Dhinkia, Gada Kujanga and Nuagaon, are protesting the project, saying it will displace them and ruin their betel leaf farming.

Posco, however, says the proposed plant would affect only 500 families but it would create thousands of jobs.