The PM said that a Cabinet sub-committee was still reviewing the proposal. ``The project has not been cancelled,'' Vajpayee told reporters at the end of his two-day visit to Uttar Pradesh. He said some MPs were of the view that there was no need for another airline when passenger traffic share in the state-owned Indian Airlines was coming down.

The Tatas had announced pulling out of the project last week citing the Centre's undue delay in clearing the Rs 1475 crore proposal to start a domestic airline.

The decision to withdraw the proposal, envisaging 40 per cent foreign equity, followed a six week deferment of the proposal by the Foreign Investment Promotion Board (FIPB) on the request of the Civil Aviation Ministry in late August.