FIPB had deferred the proposal four weeks back and asked civil aviation ministry to ascertain if it was in conformity with the new aviation guidelines, which ban direct or indirect equity participation by foreign airlines.

The new guidelines provide for equity participation up to 40 per cent and investment by non-resident Indians (NRIs) and overseas corporate bodies (OCBS) up to 100 per cent in the sector.

A Tata spokespserson had said Thursday that the proposal was in conformity with government guidelines on foreign equity (direct and indirect) and there was no question of any links with any foreign airlines.

Tatas' airline venture is among forty proposals slated to be taken up by the FIPB tomorrow. In accordance with the guidelines, foreign investors investing in the airline will nothave any shareholding from foreign airlines, she said adding there was thus no link between it and any foreign airlines.

In their application the Tatas have stated that they intend to fly a domestic airlines with an equity capital of Rs 1,475 crore, with a 40 per cent holding by foreign institutional investors (FIIs).