The invention relates to process for preparing a polylactic acid-clay nanocomposite the process comprising melt polymerization of the lactide intercalated in an organically modified clay in the presence of a catalyst to form a prepolymer-clay nanocomposite having reactive end groups, the catalyst being in the form of a complex, the complex comprising a lactide, a metal-oxo compound and a lactic acid oligomer and the clay being present in an amount up to approximately 10% by weight, the residual lactide after the melt polymerization being removed by heating the prepolymer-clay nanocomposite in the temperature range of 98°C to a temperature lower than melting point of the prepolymer and solid state polymerization of the prepolymer-clay nanocomposite. The process of the present invention yield polylactic acid-clay nanocomposites having a molecular weight from around 10,000 to 20,000 and crystallinity in the range of 25 to 95%.
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