A man was beheaded and at least one other person injured  in a suspected Islamist attack on a gas factory near the French city of Lyon, media reports.

According to sources, there were several small explosions, possibly caused by gas canisters, at the Air Products factory in Saint-Quentin-Fallavier, BBC reported.

A man has been arrested by anti-terror police, officials said.

The man in custody had no ID papers and has refused to speak to anti-terrorism police, French broadcaster BFM TV reported.

According to French newspaper Le Dauphine Libere a man was seen driving back and forth in front of the target building earlier in the day.

President Francois Hollande will leave the ongoing European Union (EU) summit in Brussels later in the day and return to France.

Alain Juppe, the mayor of Bordeaux, condemned the attack in a tweet.

“The terrorist threat is at a maximum,” he said, adding that France “must make every effort to protect its citizens,” he tweeted.

Prime Minister Manuel Valls has ordered for tight security nationwide.

According to earlier reports by The Local news portal, apart from the decapitated man, several others were also injured in the attack.