A man has been beheaded and at least one other person injured in a suspected Islamist attack on a factory near the French city of Lyon.

Several small explosive devices were also set off at the air products factory in Saint-Quentin-Fallavier.

The alleged attacker is said to have been carrying an Islamist flag, which was found nearby.

Officials said a man has been arrested in connection to the attack.

Interior Minister, Bernard Cazeneuve, has visited the scene of the attack.

At a press conference in Brussels, French  President Mr Francois Hollande confirmed that two attackers had targeted the factory.

”We have no doubt that the attack was to explode the building. The attack bears the hallmarks of a terrorist attack,” he said.

Referring to terror attacks in Paris in January, he said: “We all remember what happened before in our country”.

According to media reports, the attack occurred around 10:00 local time (08:00 GMT).

It was also said that a man was seen driving back and forth in front of the target building earlier this morning.