This follows questions being raised from sections of the government as to whether the Tata group has been transparent on details of foreign equity holding (40 per cent) in the project. The Tatas will hold the remaining 60 per cent.

The ministry, it appears, sought clarification from Tata Industries, the promoter of the project, on June 13 following which a detailed declaration was made on June 18, a copy of which is with The Financial Express.

In the declaration, Tata Industries has categorically stated that Tata Airlines Pvt Ltd conforms to all aspects of the new DGCA guidelines issued on June 11.

The Foreign Investment Promotion Board (FIPB) could not take a decision on the issue last Saturday andthe matter has been deferred till August 8, when the FIPB will meet next.

The Tatas had earlier announced that AIG and Government of Singapore Investment Corporation (GSIC) will be the foreign institutional investors in the project.

Senior Tata group sources told The Financial Express that it was still unclear as to whether one or both AIG and Government of Singapore Investment Corporation will hold a stake in the company.

"The company is unable to finalise these details unless we have all the necessary clearances in our hands. As of now the Tatas have discussed the airline project with AIG and GSIC, who in turn have evinced keen interest in participating in the equity as strategic investors," the sources said.

"Details like whether AIG and GSIC will hold 20 per cent each, or whether one of them will take the entire 40 per cent that is permissible cannot be worked out till the clearances are in place. Hence it is impossible to furnish details of shareholding structure of these FIIs, as is beingdemanded by the government," they added.

In the undertaking that has been given to the ministry of civil aviation, Tata Industries has categorically stated that no such foreign institutional investor will be selected which has any foreign airline as a shareholder. The company has also stated that the shareholding pattern of these foreign institutional investors will be revealed once the approvals were given.

Tata Industries has also given an undertaking to the ministry that no such tie-up with a foreign airline will be entered into which will give effective management control or enable it to interfere in the functioning of Tata Airlines.

It has also said that it will not enter into any hire purchase, lease finance or loan agreement with a foreign airline.

As permitted under the new director general of civil aviation (DGCA) guidelines, Tata Airline has entered into a technical arrangement with Singapore Airlines which will help the airline in aircraft maintenance, training of pilots and engineers,functioning of computer reservation systems and employing foreign pilots as and when required.

The Rs 1,475-crore airline project proposes to have seven aircraft by the end of the first year of operation and will increase its fleet strength by two every year.