The Government delayed a controversial fuel price rise in the face of more unrest yesterday as President Abdurrahman Wahid prepared to leave his troubled country on yet another overseas trip.

Police fired tear-gas and warning shots at thousands of protesting workers in three cities. It was the second straight day of violent demonstrations against new labour laws. At least three people at Sidoarjo, close to East Java's provincial capital, Surabaya, were wounded by the shots.

About 3,000 demonstrators blocked roads and attacked officers in Bandung, in West Java province. Warning shots broke up a big protest in Waru, a factory town near Surabaya.

Police insisted the bullets used in Sidorrjo to disperse those protesting against a decree to end severance pay were made of rubber, despite the casualties. "Of course, they were rubber. The victims just got hit by stray bullets," police commissioner Sudirman said when asked if police used rubber or live ammunition.

In the nearby industrial city of Surabaya, more than 5,000 workers took to the streets, hurling rocks at police trying to block people from joining their protest. On Wednesday, police fired warning shots and tear-gas to disperse the workers.

Rioters in Bandung city on Wednesday torched dozens of cars and ransacked the local Parliament but more protests yesterday were peaceful.

Previous fuel price rises have sparked bloody demonstrations, most notably those in May 1998 that helped topple ex-dictator Suharto. Petrol in Indonesia costs 1,150 rupiah a litre. The planned increases. due to have come in at midnight, would have seen the price jump to 1,450 rupiah.

Before the delay was announced, police drafted a security plan to guard petrol stations and other fuel installations. Energy Minister Purnomo Yusgiantoro said the planned average increase of 30 per cent would be reviewed today by senior social and political officials. Fuel prices are a highly sensitive issue in poverty-stricken Indonesia.

[On June 16 Agence France Presse reported that the government had announced that the 30 per cent fuel price increase would go ahead. Coordinating Minister for the Economy, Mr Burhanuddin Abdullah, said the increase would reduce subsidies earmarked for fuel from 60 trillion rupiah to 53.8 trillion rupiah annually. He added that the government would try to cushion the burden on the country's millions of poor who rely on kerosene for cooking - James Balowski.]