Sri Lankan security forces shot dead one protester and wounded dozens more when they fired on villagers at a demonstration over contaminated drinking water, police and residents said Friday.

Military spokesman Brigadier Ruwan Wanigasooriya said the army had been called in on Thursday night to assist the police when a mob threw petrol bombs and tried to attack a police station near the capital Colombo.

Locals in the village of Weliweriya, some 20 kilometres (12 miles) northeast of Colombo, had been protesting against a rubber-glove making plant that they say has polluted their ground water supply.

Police said one man was killed and 37 others were wounded in the night-time clashes in Weliweriya while the military said nine of their troops also received injuries from petrol bombs.

"There is an investigation under way and let that decide if the army opened fire or not," Wanigasooriya said when asked if troops had fired live ammunition at the protesters.

A local resident, speaking on condition of anonymity, said a large number of troops could be seen patrolling the area on Friday morning while intermittent gunfire could also be heard.

"Troops are roaming the area on motorcycles brandishing automatic guns," the resident said. "People are afraid and they are keeping indoors. Shops are closed and the streets deserted."

He said the protest broke out Thursday as residents felt the police were ignoring long-standing complaints that the glove factory had been discharging chemical waste.

The military spokesman said the protest had turned violent despite an agreement to provide residents with potable water until tests to determine the cause of ground water pollution.

"The owners agreed to provide drinking water in bowsers and even close down the factory if tests proved they were polluting ground water," Wanigasooriya said.

"We can't understand why there was violence even after this agreement."

Dipped Products Limited, a publicly quoted company that maintains the manufacturing plant, told the Colombo Stock Exchange that the factory closed Tuesday as a "precautionary measure".

The company said it was confident that the water issue in the area was not connected to their operations, but were cooperating with the authorities "for an early settlement of the matter".

Protesters blocked the main highway for several hours on Thursday night to protest the crackdown, but troops removed the barricades.