By Rahul Tandon
BBC News, Calcutta
Mamata Banerjee's call came after Tata, one of India's biggest firms, threatened to halt production of the Nano in the communist-ruled state.
Opposition groups have been protesting over claims the state seized 403 hectares (997 acres) of local farmland.
Tata plans to launch the Nano at about $2,500 (£1,340) later this year.
Fears for state's future
Mamata Banerjee, leader of the Trinamool Congress party, is not a woman who looks like she is about to change her mind.
In spite of the threat by Tata's owner, Ratan Tata, to move the plant from Singur if the agitation continues, her party has announced an indefinite siege of the factory from Sunday.
She wants 160 hectares (400 acres) of land returned to local farmers and she told me that she is not in the mood for a compromise.
"We are not interested who is Tata or data," she said.
"A good industrialist has also to be a good human being. The road is very clear - we are in favour of positive development. But if someone tries to blackmail us we will not bow our heads."
As the uncertainty over the plant continues, a number of other states in India have come forward and said they are more than happy to build the Nano.
That will worry the state government here who are desperately trying to attract investors who for years have been put off by its communist policies.
"Generally the government of West Bengal and the people should understand that the end result of what Tata is doing will be good for the state and the people of West Bengal," one businessman said.
Another was concerned about the message Tata's departure would send out about the state's image.
"We do not want Tata to go - we want them to expand," he said.
Negotiations are continuing to try and resolve this impasse. At the moment though the future of the world's cheapest car appears to be in doubt.
Siege :[ ] (災禍等的)不斷襲擊, 圍攻;包圍;圍城
in favour of 支持
put off 拖延
in doubt 不能肯定的,可懷疑的