"The FIPB cannot keep on deferring a proposal. It has to either give a go-ahead or reject a project. If the civil aviation ministry does not give its views in a fortnight or so, we plan to go ahead and consider the proposal on our own," sources in the FIPB said. It is not binding on the FIPB to take into account the views of the administrative ministry.

The Tata Airline proposal was dropped from the Foreign Investment Promotion Board (FIPB)'s schedule for Saturday as the board was unwilling to defer a decision on the project for the third time.

Senior officials of the FIPB had indicated to the Ministry of Civil Aviation that a decision on Tata Airline would have to be taken if the proposal was considered on Saturday. The proposal has already been deferred twice by the FIPB.

As the civil aviation ministry did not respond with its views on the airline proposal, it was decided by the board that dropping the Tata Airline from its agenda would be a face-saving option, sources added.

The FIPB is also under pressure from the Prime Minister's Office (PMO) to clear all foreign investment proposals within 90 days of the date of their submission.

P V Jayakrishnan, aviation secretary, had said at an aviation seminar earlier this month that the views of the civil aviation ministry will be ready within a week. However, the ministry has not given its comments so far.

Political lobbying for and against the Tata Airline has reached intense levels with groups of MPs approaching Prime Minister A B Vajpayee and union civil aviation minister Ananth Kumar with petitions to defer the airline.

Indian Airlines (IA) has also attacked the Tata Airline, which plans to start with only seven aircraft, stating that the entry of the new airline will result in a drop in capacity and revenues of IA.

Not to be left out, the national trade unions also approached the PMO pressing for spiking the airline proposal.

The Tatas have defended their airline project. In a letter to the national trade unions this week, the Tatas said that the new airline would provide employment opportunities and was not against national interest.

The Tatas pointed out that 60 per cent of stake in the airline would be with the Tata group while remaining 40 per cent will be picked-up by foreign institutional investors (FIIs).