"The Government has deferred the issue indefinitely," MTNL chairman and managing director S Rajagopalan said but added that the Government might review the situation in January next.

Based on feedback from global investors, including overseas shareholders, the bankers Goldman Sachs, HSBC and Merrill Lynch asked the Government to defer the issue, Rajagopalan said.

Asked about the road shows, he said the markets were volatile making it difficult to get appropriate price for the issue, which would have brought down the Government equity in the telecom monolith from about 55 per cent to about 52 per cent.

Cabinet had short-listed MTNL for selling Government equity during the current financial year as part of disinvestment programme to mop up Rs 10,000 crore.

The announcement ofdeferment of GDR issue comes within days of Gas Authority of India (Gail) mopping up Rs 945 crore through sale of 133 million shares through a "successful GDR" issue.

However, former Finance Minister P Chidambaram had flayed the Government for underpricing the Gail GDR in its quest to bridge the growing budgetary deficit.

Rajagopalan, however, said that non-fulfilment of promise of entering the cellular market could be one of the reasons for weak response of global investors.

He said that second quarter's performance was also not on expected lines and the actual impact of tariff re-balancing for basic telecom services might be realised only after some more time.