By Bappa Majumdar

KOLKATA, March 17 (Reuters) - Communist leaders in India's West Bengal state on Saturday shelved plans to build an industrial hub on farm land, three days after clashes between police and villagers killed 14 people.

Ruling communists and their allies said the proposed low-tax special economic zone (SEZ) and chemicals hub would no longer be built at Nandigram, 150 km (90 miles) south of state capital Kolkata, and would be shifted elsewhere in the state.

"There has been a lot of bloodshed and the left partners decided in a meeting to shift the SEZ from Nandigram," Left Front chairman Biman Bose told reporters.

"We will start a political process very soon to bring peace back in Nandigram," he said. Police would be withdrawn in phases.

Police opened fire in Nandigram on Wednesday after farmers and political activists, many armed with sickles, attacked officers as they tried to enter an area earmarked for the park, officials said.

Fourteen people -- including at least three women -- died, piling pressure on the communist government accused by many of turning its back on poor farmers.

Referring to the decision to shift the proposed industrial hub, Siddiqullah Choudhury, chief of the Jamiat-e-Ulema Hind, a Muslim group leading protests, said: "We have taught the government a lesson they will never forget. You cannot play with the lives of innocent villagers."

The park was to be built with the help of Indonesian conglomerate the Salim Group.

A Bengali-language TV channel showed people dancing in Nandigram as they waved flags of leading opposition party Trinamul Congress and shouted slogans.

Many farmers in West Bengal and elsewhere are unhappy with the compensation being offered for their land as part of the industrialisation drive. Their anger has reverberated nationally.

Despite the protests in West Bengal, India remains committed to developing the SEZs, tax havens meant to lure foreign investors and close the gap with Chinese manufacturing, the federal government said.

Trade Minister Kamal Nath told the Devil's Advocate programme to be broadcast on India's CNN-IBN channel on Sunday there would be no "political wriggling out" out of the plan to build such areas to spur growth.

Nath said land acquisition needed to be fair and transparent.

"It must be equitable, it must be at the right price. It must be inclusive of the people." (Additional reporting by Mark Williams in New Delhi)

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