"Given the absence of a credible time frame for a decision, Tatas have withdrawn their application and project. It is a very, very careful and considered decision. The proposal was delayed and deferred many a time. We are not ready to wait any longer," said Tata Industries director Sujit Gupta at a hurriedly convened press conference.

However, civil aviation minister Ananth Kumar said in Bangalore that the government still has on open mind on the proposal. Denying the Tatas' charge that his ministry had delayed a decision, Kumar said foreign investment in domestic aviation is a very sensitive issue. The government is pursuing the matter with due care and diligence, he said.

Putting the blame squarely on the civil aviation ministry, Gupta said: "The Tatas decision is not againstthe government. The problem has been with the civil aviation ministry." He denied to comment on the role of existing private airlines in scuttling the Tata project.

Gupta said Tata Industries on Tuesday conveyed the decision to shelve the project to the civil aviation ministry as also the Foreign Investment Promotion Board.

Gupta was non-committal on the possibility of reviving the airline project in the future. "What we will do in the future is up to the board of Tata Industries," he said.

The withdrawal comes in the wake of a six-week deferment by the Foreign Investment Promotion Board last Saturday on the basis of a communique from the civil aviation ministry that an expert committee would be set up to look into the objections by members of parliament and trade unions. This was the fourth deferment by the board.

Reacting strongly to the formation of an expert committee, Gupta said the ministry wanted to take more time to consider issues raised by third parties that have "no relevance to either thepolicy in place or to the Tata proposal".

This is second project to be withdrawn by the Tatas in the aviation sector in the last few weeks, the first being the airport project near Bangalore which too was kept pending by the government for a long time.

Gupta said that Tatas had first applied for the airline licence in 1995 in compliance with existing policy guidelines. "Despite this, the Tata proposal to provide the travelling public with a world-class airline remained on paper owing to the inability of four successive governments to implement their own policies," he said.

Gupta said the latest proposal made in December 1997 was also fully in line with the guidelines.

He said a large number of bureaucrats, politicians and ministries including the external affairs and industry ministers had supported the project and squarely blamed the civil aviation ministry for forcing the Tatas to shelve the proposal.