The proposal, to be heard on Saturday, was dropped from the agenda at the final moment as finance secretary Vijay Kelkar had sought more time to study the application, industry secretary TR Prasad said. The civil aviation ministry has not yet given its views on the proposal to the FIPB, he said.

"We can only list the Tata Airline case. It is a notice to the ministry of civil aviation to get back to us with their views. Now it is up to the ministry to respond," Prasad, who heads the FIPB, told The Financial Express.

On whether the FIPB will consider the Tata Airline case on August 29 even if the ministry fails to give its views on the project, Prasad said, "The ministry has seven days to respond. What will happen if it does not get back to us by August29 is a hypothetical situation. I do not want to comment on it."

Civil Aviation Secretary PV Jayakrishnan refused to comment on the Tata Airline project. Union minister for civil aviation Ananth Kumar, could not be contacted as he is on a visit to Jaipur.

The Tata Airline proposal was taken up last on August 11 but was deferred on the request of the civil aviation ministry which sought more time for giving a formal approval. The ministry also wanted to confirm whether the proposal abides by the new aviation policy announced on June 12 this year. The proposal has been hanging fire for quite some time.

The policy forbids equity participation by foreign airlines directly or indirectly in any domestic airline. While the Tatas have clarified that that Singapore Airlines, 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 andground-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 Singapore Airlines.

While the ministry has also been seeking the exact details about the distribution of equity holding by the foreign institutional investors (FIIs) in Tata Airlines -- American International Group (AIG) and the Government of Singapore Investment Corporation (GSIC), the Tatas have said that these details can be given only once the proposal is cleared. The Tatas plan to raise roughly $80 million, which is 40 per cent of the equity base of Rs 690 crore, from FIIs.

The new policy permits foreign institutional investors to hold a 40 per cent stake in domestic airline companies.