Official sources said with two key members of the board, the finance secretary and the small-scale industry secretary, having been replaced last week, the board decided to postpone its meeting to help the new incumbents take stock of the events.

Suspense over the fate of the airline proposal is, however, far from over as the civil-aviation ministry is yet to send its comments on the proposal to the board.

Besides the Tata proposal, the board was also likely to take up Toyota Motor Corporation's application for setting up an industrial park in Karnataka, to house the component manufacturing units for vehicles manufactured from its joint venture company -- Toyota Kirloskar Motors. The proposal of Banque Nationale de Paris forsetting up a non-banking finance company in the country was also on the agenda.

The Tata proposal has been deferred twice on the civil-aviation ministry's request. The ministry has sought more time for giving a formal approval to the proposal.

The aviation ministry had come under intense political pressure to seek another deferment of the proposal. The prime minister's office, however, had shown interest in clearing the project so as to send out the right signals to the private sector.

The ministry had, in the past, asked for time to examine whether the proposal abided the new aviation policy announced on June 12 this year.

The policy forbids equity participation by foreign airlines directly or indirectly in any domestic airline.

While the Tatas have clarified that Singapore Airlines (SIA), the original venture partner, will have no equity stake in the company, they have sought permission for technical collaboration with the airline.

The new policy permits an airline company to enter code-sharing,interlining and ground-handling arrangements with other airlines as long as it is not a management contract. The Tatas have also been asked to define clearly as to which of these technical collaborations will be included in its agreement with SIA.

The Tatas have already submitted the names of foreign institutional investors who are expected to pick up 40 per cent stake and invest Rs 278 crore in the airline.

Tata Industries, along with other Tata companies and domestic investors, proposes to pump in Rs 417 crore as equity into the company. The total equity will be Rs 695 crore.

The airline will take off with a fleet of seven aircraft and will fly to 12 destinations in the first year and increase its destinations to 21 in the second.