Nairobi — Three people have been killed in Kampala after a peaceful demonstration turned violent.

A man of Asian origin was stoned to death and two other people killed as protesters turned violent, police and witnesses said. The demonstrators were opposed to plans to axe parts of a rainforest reserve to grow sugarcane.

Troops in several armoured cars have been deployed in Central Kampala. Regional police commander Edward Ochom told Reuters officers opened fire with tear gas and live rounds after demonstrators began attacking Asian businesses and a Hindu temple, angered by moves to expand an Indian-owned company's sugar plantations.

"Three people have been confirmed dead," he said. "One is an Asian man who was stoned to death by the rioters. The other two are Ugandans and we are still investigating their deaths."

Witnesses reported that in attempting to turn their demonstrators away from their preferred route, the police took to firing teargas, while the demonstrators hit back by throwing stones at anti-riot police. The demonstrators also warned Asians against crossing their path, which prompted police to deploy at various Asian fixtures, notably shops and temples.

In spite of earlier assurances that no teargas would be used to stop the demonstration, police went back on their word after the demonstrators ignored a directive to use Nasser Road instead of Kampala Road.

Police had reasoned that using Kampala Road would paralyse business in the city, but the Save Mabira Crusade pressure group- the organisers of the demo, were having none of it, claiming that the demo had to be carried out in the open.

A Reuters journalist saw the bloodied body of an Asian man in the street. Police blocked roads in the centre of the capital. Scores of demonstrators hurled rocks at them.

Protest organiser Frank Muramuzi said the march began peacefully before a "misunderstanding" with the police.

"All of a sudden they opened fire with tear gas and live ammunition," Muramuzi said. "Everyone scattered but two people were seen lying in the road. I don't know if they were killed or injured, but they have been rushed to hospital."

Police commanders had earlier approved the march, called to protest at plans to cut down thousands of hectares of Mabira Forest to expand the estate of local sugar company Scoul.

Scoul is part of the Indian-owned Mehta Group.

The controversy began last year when President Yoweri Museveni ordered a study into whether to axe 7,000 hectares (17,000 acres) or nearly a third of Mabira.

Mabira - which has been a nature reserve since 1932 - is one of Uganda's last remaining patches of natural forest.

The government's proposal angered some parliamentarians and residents. They said the environmental costs of slashing the forest would far exceed the economic benefits of the plantation.

Environmentalists say destroying Mabira could have grave ecological consequences, from increased soil erosion to the drying up of rivers and rainfall, and the removal of a buffer against polluting nearby Lake Victoria.

They say it would also threaten monkeys and nine species found only in Mabira and surrounding forests - the Tit Hylia bird, six butterflies, a moth and a shrub used to treat malaria.

In a newspaper advert published on Thursday, Scoul said "anti-development lobby groups" were misleading Uganda's public about the company's plans for Mabira.

"Scoul is very conscious of the environment and would not like to disturb the ecology," it said.