Batam – Riots erupted when police and public order officers tried to evict squatters from more than 400 illegal houses on the industrial island of Batam.

At least two people were shot by police and seven others were beaten during the unrest in Riau province on Thursday. Several cars, including two belonging to TV stations, were also damaged.

The violence forced shopkeepers to close their stores for fear they would be attacked. Public order officers, assisted by police, tried to bulldoze the illegally built shanties in Tanah Longsor, Lubuk Baja sub-district. The 10ha site belongs to housing developer PT Cikitsu.

The Batam municipal administration promised to pay the squatters 2 million rupiah (S$3,800) each, but they refused to move. Instead, hundreds of squatters pelted the officers with stones, wrecked one of their trucks and set ablaze a car belonging to the Batam Authority's security directorate.

They also damaged two cars belonging to private broadcasters SCTV and Metro TV.

One of the squatters, Toni, said the residents refused to accept the compensation, labelling the amount as "derisory".

The riot ended after three hours when Batam legislative council speaker Soeryo Respationo asked the representatives of the squatters to restart talks, which were held later in the day. The talks ended with a decision to delay the eviction indefinitely.

Barelang deputy police chief Heru Winarko said at least two people were being questioned for allegedly inciting the unrest. Security in the area returned to normal in the afternoon.

The building of illegal shelters, now numbering more than 40,000, has been a longstanding problem in Batam, which is 20km away from Singapore.

The illegal settlements were set up during the administration of former president Suharto.