The decision not to "pursue the matter any further" was taken at an emergency meeting of the cabinet after prime minister Atal Bihari Vajpayee issued a direction from New York that it meet on Saturday and decide the issue.

Despite some hardliners in the BJP pushing for reiteration of the cabinet recommendation, the retreat by the government came with some allies of the ruling coalition including Lok Shakti's Ramakrishna Hegde and Akali Dal's Surjit Singh Barnala making a strong plea that the government should not carry the matter any further in deference to president's reservations against the cabinet decision. Home minister LK Advani, who chaired the 45-minute meeting, told reporters "we will not press the matter further".

Immediately after the meeting at South Block,Advani conveyed the cabinet decision to the president. This is the second time in the less than a year that president Narayanan has forced the government to retrace its steps on recommendation for imposition of president's rule.

Last year, the United Front government dropped its moves for dismissal of the Kalyan Singh government in Uttar Pradesh after Narayanan returned the cabinet's recommendation.

After a 90-minute meeting of cabinet ministers presided by home minister LK Advani, a senior cabinet member, who requested anonymity, said the government was determined to impose president's rule in Bihar.