Two of Asia's most powerful women are locked in a feud after Mayawati, the self-styled queen of India's “Untouchables”, tried to scupper a pet project of Sonia Gandhi, the leader of the ruling Congress Party.

The tussle over a £225 million railway-carriage factory sets the stage for a bigger showdown between India's two leading women politicians in national parliamentary elections due by May next year.

Mrs Gandhi, 61, announced in February last year that the factory would be built in her parliamentary constituency in the northern state of Uttar Pradesh, India's most populous region, and one of its poorest.

She and Rahul, her son and heir, were due to lay the foundation stone of the facility, which was supposed to provide 10,000 jobs in her rural constituency of Rae Bareilly, today.

On Sunday, however, Mayawati wielded her power as chief minister of Uttar Pradesh to block the allocation of 467 acres of land for the plant, halting the project. Her government said that local farmers were afraid that they would lose their land and livelihoods without being given proper compensation or jobs at the new factory.

Local officials cautioned of violent protests similar to those that forced Tata Motors to shift production of the Nano, the world's cheapest car, from the state of West Bengal this month. “There are possibilities of self-immolation-type incidents,” they quoted Santosh Kumar, Rae Bareilly's district magistrate, as warning the local government in a letter.

Congress officials responded by accusing Mayawati of blocking a highly beneficial project to embarrass Mrs Gandhi before next year's election. They say there have been no protests against the plant so far.

“This is a figment of her imagination - it's nothing but pure pettiness,” Manish Tewari, a Congress representative, told The Times. “She thinks it is more important to score political Brownie points than to promote economic development.”

The Railways Ministry also filed a petition with a local High Court, which stayed Mayawati's decision yesterday and directed her government to file a counter-petition.

The controversy reflects the charged political atmosphere in India since the Congress-led coalition Government survived a parliamentary no-confidence vote over a nuclear deal with the United States in July.

Congress split with its Communist allies over the deal and joined forces with a small party, based in Uttar Pradesh, that is the arch rival of Mayawati's Bahujan Samaj Party.

Uttar Pradesh, with a population of 180 million, is now a key battleground for next year's election. Analysts say that Mayawati could win enough seats to be a kingmaker in the coalition-building that will follow the election - and could even demand the Prime Ministership. The saga also reflects the personal rivalry between Mayawati and Mrs Gandhi, who is grooming her son to take over as head of Congress and become its candidate for prime minister.

The two women come from vastly different backgrounds. Mrs Gandhi was born in Italy, met Rajiv Gandhi, the future Indian Prime Minister, while studying in Cambridge, moved to India to marry him, and took over as head of the Congress Party seven years after he was assassinated in 1991.

Mayawati, 52, is an Untouchable who was born to a poor clerk and an illiterate housewife with nine children and had to battle caste discrimination to study law and work as a schoolteacher before entering politics.

Now worth about £6.8 million, she has been embroiled in several corruption scandals and is known for her love of expensive jewellery and statues of herself, yet remains wildly popular among India's 165 million Untouchables.

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