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French decapitation victim was 'suspect's boss'

Two men carrying the Islamic State flag attacked a French factory and set off a series of small explosive devices
French police attend the scene of an attack on a factory in eastern France (Twitter/@TopikNL)

The man decapitated in an attack Friday on an industrial gas factory in eastern France was the boss of the suspect now in police custody, legal sources said.

The head of the victim, who ran a delivery service, was found pinned to the gates at the American-owned Air Products factory in Saint-Quentin-Fallavier. It was surrounded by two Islamist flags.

His body was found inside the factory, the site of what French President Francois Hollande called a terrorist attack.

Yassin Salhi, 35, is suspected of driving one of the delivery service's vehicles into the factory grounds during the attack. 

A French prosecutor said there was no indication that Sahli had an accomplice on the site.

Though access to the facility is restricted because it contains dangerous substances, the delivery company had clearance to enter. 

The suspected attacker entered the factory and set off several small explosive devices, the source told AFP. 

AFP reported that Arabic writing was found on a severed head pinned to the factory gates. The identity of the person killed is not yet known. 

The suspected attacker was arrested and was known to intelligence services in Lyon, the sources told AFP. Authorities are in the process of investigating whether he had an accomplice.

"Through his message, his grim and bloody imagery, the perpetrator of the attack declared war not only to the Republic and to democracy but to civilisation too," said former French President Nicolas Sarkozy.

"The Republic will never give up in front of terrorist barbarism," he said.

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.

Interior Minister Bernard Cazeneuve said he would go "immediately" to the scene, his office said. French President Francois Hollande will return home early from an EU summit on Friday, officials said.

"He will return early this afternoon and is in constant contact with Interior Minister Bernard Cazeneuve and the security services," the official said, adding that he would make a statement to the press in Brussels.

"The president saw the first images of the attack on the 24-news channels with German Chancellor Angela Merkel beside him, who was visibly shocked," an official added.

A defence council will gather at 3pm local time in Elysée, said Defence Minister Jean-Yves Le Drian.