The disputed land measures about 400 acres.
"We agreed for talks only after assurances that the demand of returning 400 acres would be discussed," Chattopadhayay said.
The opposition wants West Bengal governor Gopalkrishna Gandhi to play peacemaker.
Work at the Tata factory in Singur, an hour's drive from West Bengal capital Kolkata, was suspended last week after threats from protesters.
The government, eager to resolve an issue threatening its industry-friendly image, said it was willing to discuss fresh compensation offers. Analysts agree that is the best way forward.
"The compensation paid for the land is measly," said Abhirup Sarkar, a Kolkata-based economist and social commentator.
"It should be three to four times higher than what was paid."
The controversy has seen other Indian states offering to host the Nano factory.
Shares in Tata Motors, India's top vehicle maker, have not been significantly affected by the dispute. They were down 1.5 per cent at 431 rupees at 0748 GMT, in a Mumbai market that was up 1.8 per cent.
Epaper
Newsletter
Stocks
Weather
Horoscope
