Deadly attack reported at factory in France Islamic flag and decapitated man found at industrial site near Lyon, with one suspect arrested, reports say.

An attacker carrying an Islamic flag has killed one person and injured several others at a gas factory in eastern France, AFP reported, citing a legal source.

A man thought to be the person who carried out the attack was later arrested.

The suspected attacker entered the factory, about 30km southeast of Lyon, and set off several small explosive devices, a source told AFP.

A decapitated body was found nearby the factory, another source said.

"According to the initial findings of the inquiry, one or several individuals on board a vehicle, drove into the factory. An explosion then took place," the source said.

"The decapitated body of a person was found nearby the factory but we do not yet know whether the body was transported to the place or not."

The total number of casualties was not immediately reported. It is not yet known what the text on the Islamic flag said.

The target of the attack is a chemical factory which is reportedly linked to a French company called Air Products that works with Total and specialises in liquid gas.

The attack occurred around 10am local time (08:00 GMT), according to local media.

The attack came nearly six months after the attacks in and around Paris that killed 17 people in January that started with a shooting at satirical magazine Charlie Hebdo.

French Interior Minister Bernard Cazeneuve said he would go "immediately" to the scene, his office said.

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