The Mexican Government says it will offer better compensation to peasant farmers who are opposed to plans to build a new airport near Mexico City.

The move comes after last week's confrontation during which the peasants took 19 people hostage to protest against the project in the town of San Salvador Atenco.

The execution of the construction of the airport will be redrawn and that implies a new price plan

Santiago Creel, Interior Secretary

However, Interior Secretary Santiago Creel said the issue must be solved through negotiations alone.

On Monday, the protesters released the last of the hostages, after the authorities freed 12 farmers, who had been arrested during clashes with police.

At one point, the farmers had threatened to kill the hostages, who were mostly local officials or federal police officers.

More money

"The plan is very clear: the execution of the construction of the airport will be redrawn and that implies a new price plan," Mr Creel told a news conference.

He said the government of President Vicente Fox was willing to better other terms with the communities affected by an October decree to expropriate more than 10,000 acres (4,000 hectares) of land to build the new six-runway $2bn airport in Texcoco district, just outside Mexico City.

Creel: Only negotiations will do

Farmers and their families affected by the expropriation would be offered improved housing, education facilities and social services, Mr Creel said.

"Once all the government's offer is seen, you can go back to your respective communal farms to consider the offer," he said moments before starting a meeting with community leaders.

Officials say that the existing Mexico City airport, which has two runways, cannot be extended as it is surrounded by residential areas.

If the proposal goes ahead, a government order will entitle the villagers to as little as 70 cents per square metre of land, a price they say is ridiculously low.

The protesters say they will not agree to the sale of the land at any price.