BHUBANESWAR, India, April 15 (Reuters) - Indian farmers opposing plans to take their land for a huge new steel plant said on Sunday they would make their children face off with police if necessary.

Villagers of Dhinkia and nearby villages in the eastern coastal state of Orissa, where South Korea's POSCO <005490.KS> is planning the $12 billion plant, have put up bamboo gates to try to prevent police forcing them off their land.

Clashes between supporters and opponents of the project injured 50 people last month, and protesters say a showdown with police could take place any time.

"The children are our greatest strength," Abhay Sahu, of a local body formed to protest against the project, said.

"We have already started putting them near the barricades. About 70 children guard the nine gates in the morning. We will put them in the front if police come. They would be backed by women and youths."

By deploying their children, the villagers hope to ward off the police who they say may try to enter the fields forcefully after the state government agreed to hand over hundreds of acres to the company.

A senior police officer in the district said the villagers' decision to use the children was "unfortunate".

"We will not allow them to do so," the officer, who declined to be identified, told Reuters.

There was no immediate reaction from POSCO.

Activists say the POSCO project -- India's largest foreign investment project -- could displace around 20,000 people from eight villages and could also lead to environmental concerns.

The government says the plant would affect only 500 families and create thousands of jobs. Orissa's government says its rehabilitation package is among the best, offering cash and a job for at least one member of each family losing its land.

POSCO has also promised to help find plots for landowners.

But the protests could cast a shadow over India's attractiveness as an investment destination, especially after neighbouring West Bengal state shelved plans to acquire farmland for a chemicals complex after police killed 14 protesters.

Protesters said they boycotted a meeting called by officials on Sunday to hear the villagers' views on the POSCO project.

"It was a sham," Sahu said. "The public aspirations have not been taken into account and therefore we decided to boycott it."

Another villager Jugal Nayak said he didn't go for fear of being arrested as there were "hundreds of policemen" around where the meeting was held.

But the chief administrator of Jagatsinghpur district, where the meeting was organised, said 100-150 villagers attended.

"There was no violence," P.K. Meherda said. "There was no boycott. There would be no more public hearings on the said proposal."

Anti-poverty agency ActionAid questioned the way the public hearing was conducted. "The administration limited the scope of the hearing by saying only environment points would be discussed," Madhumita Ray of ActionAid India said.

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