(Adds new rebel attack paragraph 5)

By Biswajyoti Das

GUWAHATI, India, May 15 (Reuters) - Contractors have stopped work on two major federally funded road and railways projects in India's northeast after rebels killed a dozen labourers over the weekend.

More than 4,000 workers hired by 16 private construction firms in insurgency-hit northeastern Assam state have decided to withdraw from construction sites fearing fresh rebel attacks from tribal militants demanding autonomy in the region.

"It is true tension is there. Workers don't want to work and we can't force them to work," Dilip Bora, a spokesman of the Northeast Frontier Railways, told Reuters on Thursday.

Tribal insurgents killed 11 railway workers in Assam on Sunday.

On Thursday, militants attacked and killed 11 people, including a train driver and 10 cement factory workers, police said.

India's northeast, comprising eight states, has suffered separatist and tribal insurgencies for the past 60 years, as militant groups accuse New Delhi of plundering the region's mineral and forest resources, but investing little in return.

The region is home to more than 200 tribes and ethnic groups.

India is building a four-lane highway through the troubled North Cachar Hills district, linking Assam with the rest of India as part the Golden Quadrilateral project aimed at connecting the country's cities and ports.

But authorities in Assam say both road and railway projects which were set to have been completed by the end of this year, now have been delayed by at least four years because of frequent attacks by rebels and disruption of construction activities.

Tribal militants in Assam fighting for regional autonomy want national projects to be stopped till their demands are fulfilled.

The area has large deposits of oil, limestone, coal, besides potential for hydro-power generation.

Tribal militants of a breakaway group of the little-known Dima Halam Daogah group frequently target non-tribals working in saw mills, farmlands, construction sites and power stations and have killed around 60 people in past few months, police said.

Around 1,500 former soldiers have been recruited on contract basis, but the majority of them are unwilling to take the risk, as government rules prohibit them from carrying firearms.

"Our men will be just sitting ducks, if they are not given weapons," said Gobinda Baruah, a former Wing Commander in the Indian Air Force (IAF) and now the secretary of the All Assam Ex-Servicemen Association. (Editing by Alistair Scrutton and David Fogarty)

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