CHENNAI, INDIA (AFP, REUTERS) - A protester was killed by a rubber bullet in a second day of clashes in southern India Wednesday, after 10 were shot dead when police opened fire on a rally demanding the closure of a copper plant, officials said.

Police fired rubber bullets at the crowd and sent volleys of live ammunition overhead, officials and witnesses said, after protesters in the port city of Tuticorin hurled home-made bombs and pelted stones at them.

"We fired live ammunition in the air to disperse the protesters. But the mob continued to pelt stones and bombs. They were setting fire to vehicles," a police officer told AFP.

"We were forced to fire rubber bullets which unfortunately hit one man in the spine and he died," he added. Another police officer at the scene also said that a 22-year-old man had died.

Outrage swelled on Wednesday (May 23) over the deaths of the 10 protesters in what critics termed "mass murder".

The violence erupted on Tuesday in Tamil Nadu state at a long-running demonstration demanding the closure of the smelting plant owned by British mining giant Vedanta Resources, which residents say is causing environmental damage.

The state's Chief Minister has ordered a judicial inquiry into the shootings but the move failed to stem rising anger over the clashes, which also left about 80 wounded.

Mr M.K. Stalin, leader of the main Tamil Nadu opposition party, the DMK, said police were guilty of "atrocities".

"Mass Murder of Innocent People," he tweeted on Wednesday. "Who ordered the police firing on protesters? Why were automatic weapons used to disperse the crowd and under what law is this permitted?"

A video of a police officer on top of a bus and pointing an assault rifle at crowds has fuelled fresh anger.

Mr Rahul Gandhi, the national leader of the opposition Congress party, has called the deaths "a brutal example of state-sponsored terrorism".

"These citizens were murdered for protesting against injustice," he said.

Police said on Tuesday that 12 people had died, but later revised the toll in the port city of Tuticorin.

Tuticorin district police superintendent P. Mahendran said 18 officers were also wounded in the clashes.

"The situation is tense but under control today," he said. "The postmortem on the bodies is being conducted and they will be handed over to families today."

The plant, about 600 kilometres south of Tamil Nadu's state capital, Chennai, is currently closed as Vedanta's Sterlite Copper subsidiary seeks a new licence so it can be expanded.

The protesters had set ablaze the local administrator's office after they were denied permission to hold a rally at the plant.

Police said efforts to disperse the crowd of several thousand with a baton charge and teargas volleys failed before authorities used live ammunition.

Tamil Nadu Chief Minister Edappadi Palaniswami ordered the judicial inquiry into the shootings, but defended the police.

"The police had to take action under unavoidable circumstances to protect public life and property as the protesters resorted to repeated violence," he said.

The families of each victim would be offered one million rupees (S$19,678.15) as compensation, he added.

The deaths came on the 100th day of demonstrations against the plant, which environmentalists and residents claim is contaminating water sources, a charge the company denies.

The protests intensified after Vedanta, owned by an Indian billionaire but with its head office in London, sought to double the 400,000-tonne annual capacity of the plant.

It was shut briefly after an alleged gas leak in March 2013 that left hundreds with breathing difficulties, nausea and throat infections.

The company maintains that it adheres to environmental standards and said it was the victim of "false propaganda" about its operations.

An Indian court halted the proposed expansion on Wednesday on environmental grounds.

" Vedanta shall cease construction and all other activities on-site proposed Unit-II of the Copper Smelting Plant at Tuticorin (Thoothukudi) with immediate effect," the order from the Madras high court said.

It ordered authorities to hold a public hearing over Vedanta's application for environmental clearance and said a decision on environment approval would be completed within a period of four months.

The plant, one of India's biggest, has been shut for more than 50 days and will remain closed until at least June 6 because the local pollution regulator has said the facility is not complying with environmental rules.

Tamil Nadu is one of India's most industrialised and prosperous states and similar protests over environmental concerns have turned deadly in the past.

Tuticorin witnessed violent demonstrations in 2012 over a nuclear power plant in neighbouring Kudankulam district that left one person dead.