Up to 7,000 people had to be evacuated after the blast at the Fuyuan Chemical Plant in Jiangsu province, the official Xinhua news agency said.

The plant had not yet begun production when Friday's explosion shattered the base, injuring a further 29 workers.

The cause is under investigation, but some reports blame workers on the site.

Toxic gas

Thousands of local residents were forced to leave their homes on Friday following the blast after concerns over the release of toxic gas.

They were given the all-clear to return on Saturday by the environmental protection authorities, the Xinhua report said.

An official from the government of Sheyang county where the plant is located told the agency the cause of the blast was under investigation.

"Preliminary investigation showed improper operation by workers was mainly to blame for the accident," Xinhua said of the incident.

Fatal industrial accidents are not uncommon in China, which has seen a boom in production employment in recent months.

A total of 15,396 people died in 12,800 industrial, mining and commercial enterprise accidents in 2005, according to government figures.