An American factory boss in China held hostage in his office for five days by workers told AFP he won't be released until a labour dispute is resolved and that authorities have declined to intervene.

Chip Starnes, who had come from the US-based Specialty Medical Supplies company to lay off 30 employees, said the remaining 100 then barred him from leaving until they reached a resolution.

"They adamantly said, I'm here to stay, live in my office and live on the cot until this gets done," he told AFP Tuesday by phone.

"And they said that my office is very nice so I have nothing to complain about."

Starnes said dozens of employees were guarding the exits of the work site, located in the northern Beijing district of Huairou.

Meanwhile local authorities were providing three meals a day and made sure no violence broke out. But, Starnes said, officials won't intervene.

"The police? They will not get involved in this whatsoever."

An AFP photographer at the scene said there were eight unmarked police cars and uniformed police officers.

"Put everybody in a playpen together and that's where you stay until someone wins, I guess, and that's what we're going through right now," Starnes said.

The district police could not be reached for comment.

Chu Lixiang, an official from the Huairou labour union involved in the negotiations, declined to say if Starnes had freedom of movement.

"It's his office and his factory, and he's just been staying here negotiating," she told AFP.

Starnes said the Chinese general manager and controller of the factory were also being held.

The nature of the disagreement was itself under dispute.

The Xinhua state news agency cited a statement from Huairou authorities as saying that the 100 workers were seeking two months' overdue wages.

But Starnes said that they were demanding to be laid off so they could receive severance packages like the 30 who were let go had obtained.

For longtime employees at the factory, opened 10 years ago, the compensation could amount to a year's pay, Starnes said.

The company preferred to keep the 100 workers employed, Starnes said.

He said that due to an oversight the 30 laid-off employees had not received their last two months' salary, but added that the error was fixed Monday.

"Everybody is 100 percent up-to-date on payment," he said.

The Florida-based company has 200 employees altogether.

US embassy spokesman Nolan Barkhouse said its officials had visited Starnes on Monday and confirmed that he was safe.

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