Posco has proposed a steel complex that will be India's largest foreign direct investment involving a 12 million tonne-steel plant costing $9 billion, a 30 million tonne-iron ore mine, a mill for hot-rolled coils and a seaport along the state's coast.

"The state government should carefully deal with Posco as it is likely to go against the interests of the state," warned BJP's state treasurer and Rajya Sabha MP Surendra Lath.

Posco officials could not be reached for their comments on the issue.

Lath's warning came even as Orissa's Steel and Mines Minister Padmanav Behera said his government would sign the deal June 22. Posco, according to Lath, has reportedly asked the state government for mining rights for 600 million tonnes of iron ore for 30 years and 400 million tonnes in long-term supplies.

Lath said Posco's intention does not seem to be fair and the deal may go against the state's interests. "Posco has proposed to set up a 12-million tonne capacity steel plant in several phases. But initially, in the first phase, it has proposed to set up a plant of three million tonnes," Lath told IANS.

There are a number of Indian companies, including the Tatas, which have proposed similar capacity steel plants in the state. Why is the state government not giving priority to them? he asked.

Posco is eyeing the iron ore reserves in Orissa rather than the plant, Lath said, adding that this was evident from the conditions the company has been put before the government.

"The state government should not do anything hurriedly. It should examine all aspects very carefully," he said.

The main opposition in the state, the Congress, has also opposed the project, with one of its leaders, Lalatendu Bidyadhar Mohapatra, demanding a special assembly session to discuss the matter.

Similarly, the Left parties have said they will hold a protest meeting in the state capital against the deal.

"Why cannot the state-run Mining Corporation of India market iron ore to different companies, instead of the government handing over the mining lease?" asked Communist Party of India (CPI) general secretary A.B. Bardhan.

"We will put pressure on the central government to prevent a memorandum of understanding between the government of Orissa and Posco," he said.

Meanwhile, the leaders of Orissa Gana Parishad (OGP), the Communist parties and the Janata Dal-S have decided to meet Prime Minister Manmohan Singh on June 17 to protest the proposed deal.

This was decided at a meeting of the four parties Sunday, OGP president Bijay Mohapatra said, adding that they also propose to jointly launch a statewide agitation to protest what they describe as the government's surrender to Posco's demand.

The Korean company, Mohapatra added, has sought three million tonnes of iron ore -- more than double of what it will require for its plant. Such an agreement is not in the state's interests, he said.