BEIJING, Oct 16 (Reuters) - Chinese villagers kidnapped construction workers, tied them up, doused them in gasoline and set it ablaze when a land dispute turned violent, the government said on Thursday, providing grisly details of the latest bout of rural unrest.

Eight people died in Tuesday's unrest when tension over a new trading and logistics centre boiled over in Jinning, a suburb of Kunming, the capital of Yunnan province in China's southwest.

Six of the dead were workers and the other two villagers, while 18 people were injured, one of them seriously.

The Kunming government's propaganda department said on its official microblog that residents of Fuyou village had been upset for many months over compensation for the land being used in the project, and had already forced building to stop in May.

But on Tuesday, thousands of workers flooded back to the site to resume construction, it added.

"On that day, eight workers who were having breakfast in Fuyou village were illegally detained by villagers, their hands and legs tied up, they were beaten, had gasoline poured on them and were then taken to a road near the building site," the government said.

Later, hundreds of villagers raided the construction site and fought with workers.

"During the clash, villagers threw home-made explosives into the crowd and set the kidnapped workers alight, while the workers fought the villagers with their tools, causing serious injuries and loss of life," the government said in a brief statement.

Police will severely punish those who "organised, carried out and proactively participated in illegal criminal activities, no matter who they are", the government added, without giving details.

Land disputes are one of the main causes of the tens of thousands of protests across China each year. Most go unreported, though some, such as a revolt in the southern village of Wukan in 2011, have attained a high profile and spurred Beijing to promise action.

China's slowing economy has reduced tax revenues for local governments at a time when the cooling property market has also dampened land sales, an important source of government income.

The unrest in Yunnan comes as the ruling Communist Party meets next week for a conclave to discuss how to strengthen the rule of law, in hopes of damping instability that is greatly feared by the party. (Reporting by Ben Blanchard; Editing by Clarence Fernandez)