By Sujoy Dhar

KOLKATA, June 20 (Reuters) - Indian police on Saturday said they had regained control of a West Bengal town captured by Maoist rebels in one of the most brazen attacks in recent years that sparked unease among investors in the communist-ruled state.

Marching behind an anti-landmine vehicle, hundreds of police in flak jackets and combat gear entered the town of Lalgarh, about 170 km (100 miles) from Kolkata, capital of the eastern state.

"Our forces have reached Lalgarh town without any resistance. We are on the move to clear the entire region of rebels," Raj Kanojia, the state's inspector general of police, told Reuters. The police would now launch a second assault on the Maoists, who are believed to have set up camps 4 km from the town. "We will complete our job and establish rule of law so that people can live without fear," Praveen Kumar, a police official in charge of the operation, told reporters on Saturday.

In the past week, hundreds of Maoists, who are expanding their influence across the country, had chased away police and killed government supporters from around Lalgarh, which they declared a "liberated zone".

India's JSW Steel Ltd <JSTL.BO>, the country's third largest steel producer, is setting up a $7 billion, 10-million tonne steel plant near Lalgarh, and the growing presence of Maoists across swathes of rural India has worried many investors. "It is a bad sign for industry ... the government must find a long-term solution," said Harsh Neotia, chairman of Kolkata-based Ambuja Realty.

MENACE

Earlier in the week, police used teargas and fired rubber bullets to break through "human walls" of Maoist-backed villagers armed with bows and arrows, and engaged in fierce gun battles.

Besides injuring a policeman in a landmine blast on Friday, the rebels have killed at least 10 members of the ruling Communist Party of India-Marxist this month in the region.

State Chief Minister Buddhadeb Bhattacharjee on Saturday met Prime Minister Manmohan Singh and Home Minister Palaniappan Chidambaram in New Delhi to seek more help in cracking down on the rebels.

"The state police and central police have jointly started a campaign against the Maoists. It will take some time to get rid of the Maoist menace, but we are determined," Bhattacharjee said. India is battling Maoists across eastern, central and southern India, an insurgency Singh has described as the biggest internal security challenge since independence.

For a Q&A on the threat posed by Maoist rebels in India see [ID:nDEL189848] (Additional reporting by Jayanta Shaw; Writing by Rina Chandran; Editing by Alex Richardson)

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