Fire up the engine has taken on a whole different meaning in India after three drivers reported that blazes started spontaneously in their Nanos, the world's cheapest car.

Tata Motors, maker of the Nano, which costs about £1,300, today ruled out a recall of the little runabout despite the fires, which started in the steering column.

The manufacturer of the car said a short circuit in the combination switch that controls the Nano’s headlights, windscreen wipers and indicators was thought to be responsible for the incidents, which have left Nano owners furious.

Sunil Kumar Panwanda, the owner of a Nano that caught fire in Delhi, said that his daughter parked the car outside his home on Tuesday afternoon. Three hours later it was in flames.

“I had bought the car for my children and they are now terrified of driving it," he told a television news channel. “I want the company to refund my money and take back the vehicle.”

Ravindra Bhagat, another Nano owner whose car set alight in the city of Ahmedabad, said: “I bought the car because Ratan Tata [the head of Tata] drove and introduced it.

“I thought this small car will be convenient for daily use in the city. Now, I feel it is better to drive a big car. Even if I get a replacement, I will not accept it.”

Another fire was reported in the city of Lucknow. There were no reports of injury in any of the incidents. Tata today denied that there had been any fires in its cars, only "minor smoking" and "localised melting of some of fire retardant plastic parts".

A spokesman for Tata Motors, which also owns Jaguar and Land Rover in Britain, said it was considering carrying out “pre-emptive audit checks” on new Nanos to check the fault. It may also ask the owners of the 7,500 cars it has so far delivered to bring them in to be inspected. It denied that the car will have to be redesigned and said a recall would not be necessary.

The spokesman said: “We do not believe this is a generic fault.”

The malfunction is the latest in a series of glitches to have beset the Nano, a model that was heralded as ushering in a new era of super-thrifty engineering and lauded as an emblem of India's status as an emerging economic power when it was first unveiled in Delhi in January 2008.

In March of this year, the so-called "people's car" was launched commercially amid great fanfare in Mumbai. Immediately, however, it faced a large hurdle in its mission to bring four-wheel motoring within the reach of India's motorcycle riding middle classes: a relatively tiny production output of just 50,000 units in its first year.

The paucity of supply was a result of a fierce dispute over the land on which Tata was building a factory to produce the Nano - a row regarded as symbolic of the social tensions India faces as it strives to emulate the manufacturing might of China.

Farmers in the state of West Bengal alleged that the Nano site had been stolen from them and mounted violent demonstrations that forced the company to abandon the partly built plant at a cost of as much as $350 million. Because of the disruption, the Nano was launched seven months behind schedule.

The delay in ramping up output of the Nano has left the company vulnerable to competition from other ultra-cheap runabouts under development.

Rival projects include a joint venture between Renault-Nissan and Bajaj, the Indian two-wheeler manufacturer, which said during the summer that they were on track to produce a Nano-type super-compact car by 2011.

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