'Do you believe they'd be interested in rehousing us if we weren't sitting on prime real estate?' asks the 71-year-old, a retired steel contractor who arrived here 40 years ago and built his own business.

The first inhabitants of Dharavi, as the slum is known, are expected to be rehoused within the next two years, said Mr Mukesh Mehta, the government-appointed architect in charge of the US$2.3 billion (S$3 billion) project that he calls a 'pioneering effort' to give the people decent living conditions.

But those who oppose the plan want to stay put until a redevelopment scheme is worked out that suits them and not just the developers who are planning to move in with a mix of public housing, luxury condominiums, offices and parks.

Maharashtra state officials plan to transform Mumbai, where 60 per cent of the 18 million-strong population are slum dwellers, into a 'world-class' financial hub by 2015.

To attain that goal, Dharavi and dozens of other shanty towns in the city must go. Under the plan, 57,000 families or about 300,000 people will be housed in free but small - 225 sq ft - one-bedroom apartments in seven-storey blocks on the 200ha site surrounded by some of the world's costliest real estate.

In returning for building the free flats, the developers get to construct buildings to be sold at market rates.

The project is opposed by many residents who have created a self-sustaining economy.

Dharavi, a religious and cultural melting pot which every year draws thousands of migrants seeking to make their fortune, is a flourishing industrial centre.

'Seventy per cent of the families are self-employed,' said Mr Jockin Arputham, head of the National Slum Dwellers Federation.

There are potteries, tanneries, garment workshops and other micro-industries. The 15,000-odd cramped one-room factories and hundreds of cottage industries have an estimated total turnover of US$500 million a year, according to federal government data.

The area is also famed for its thriving recycling industry in which workers break up computers, shred plastic, flatten cardboard and stack paper.

'How will I earn a living?' asked potter Hira Lal Rathod, gesturing to his 1,000 sq ft home where his four children live and he works. 'To give us 225 sq ft is not workable.'

But some Dharavi residents, like taxi-driver Suresh Chaudharyfrom northern Uttar Pradesh state, support the development.

He has been living in a 150 sq ft second-storey room with his wife, 14-year-old daughter and mother for the last 15 years. It is blisteringly hot during the summer and they have to line up to use a communal toilet.

'Anything that gives us more space would be a help and having our own toilet and tap water will make a real difference,' said the 42-year-old.

AGENCE FRANCE-PRESSE