The attack took place at the headquarters of Air Products, in Saint-Quentin-Fallavier, near Grenoble, in the south east of the country.

The attack is believed to have been accompanied by several explosions on the site, caused by 'gas bombs' being ignited, causing many of the injuries.

The murdered man's head is understood to have been found 30 feet away from his body, hanging on the factory's fence.

The dead man's head was covered in Arabic 'inscriptions' before being placed on the fence, according to local journalists at the scene.

Local media reported that a 30-year-old man 'known to security services' has already been arrested at the scene, telling police officers that he is a member of the Islamic State terror group.

France has been on its highest security alert ever since the Paris attacks and according to the Dauphiné Libéré, an internal security services source said that 'all the signals in recent weeks have been pointing to red for an attack of this nature occurring in the national territory.'