Riot police used water cannon to disperse protesters outside South Korea's national assembly on Thursday amid a deepening political standoff over the ruling conservatives' final push to seal a trade deal with the United States.

About 2,000 people rallied outside parliament where members of a small far-left party have barricaded themselves in a committee meeting room to block a debate on a bill which would clear the way for final approval of the free trade agreement (FTA).

The FTA, which some studies say could boost $67 billion (42 billion pounds) two-way trade between the allies by as much as a quarter, was approved by the U.S. Congress last month and signed into law by President Barack Obama. It had been expected to sail through the South Korean parliament where the ruling Grand National Party (GNP) has a majority.

But the opposition, buoyed by a landslide victory in a key by-election in the capital last week, has flexed its muscle and demanded changes to the deal, saying it is skewed in Washington's favour.

The GNP had set a November 1 deadline to ratify the pact to allow it come into effect at the start of next year.

Opposition lawmakers have stalled proceedings on the pact this week. They succeeded in blocking it again on Thursday.

ELECTION WORRIES

The conservative GNP, which has a comfortable majority in parliament, has been reluctant to push the bill through, wary of risking political damage before key elections next year where they could lose control of both the assembly and the executive branch.

The GNP's leadership is also worried that forcing the pact through parliament could spark trouble in the main chamber.

Physical violence among lawmakers in recent years has included incidents of chair-throwing and fighting, prompting opposition and ruling parties last year to agree not to resort to violence.

The GNP has criticized the main opposition Democratic Party for trying to block a deal that was negotiated and signed when it was in power in 2007.

Democratic Party leader Sohn Hak-kyu pledged on Thursday the opposition parties would not back down until the bill is revised to fix an imbalance of national interests created when it was reworked last year to address U.S. automaker concern.

If the government tries to force the free trade bill through, we will fight to block it to the end, Sohn told a meeting of a coalition of lawmakers and civic group leaders who oppose the deal.

Despite charges that it gives the U.S. auto industry a major inroad into the South Korean market, domestic car makers stand to gain with greater access to the United States.

U.S. farmers are also expected to be big winners under the agreement, with more than $1.8 billion a year in increased exports to South Korea.

The deal is the biggest U.S. trade pact since the North America Free Trade Agreement went into force in 1994.

(Editing by Jeremy Laurence and Yoko Nishikawa)