Under the compromise formula, foreign investment in insurance will be capped at 26 per cent. RSS affiliate Swadeshi Jagran Manch is, however, adamant on its stand and has told the government firmly on Thursday that it would in no case agree to the opening of the domestic insurance sector to foreign multinationals.

Sources said the other option could be to delink the foreign equity component from the present bill, according to party sources. This would provide the much-needed breather to the government.

Finance minister Yashwant Sinha told reporters here that "the government is trying to arrive at a solution and he has requested the SJM to call off its agitation". He however refused to give any details of the compromise.

Sinha also met a delegation of SJM led by S Gurumurthy earlier in the day. Sinhasubsequently met prime minister AB Vajpayee to brief him on his discussion with the manch functionaries.

Till late Thursday evening, the indications were that the SJM continued to be adamant on its demand even as official sources maintained that an amicable arrangement would be reached to avoid further embarrassment to the government.

These sources said the government had accommodated the swadeshi lobby by reducing the foreign equity component to 26 per cent. The 14 per cent stake to NRI should not be interpreted wrongly, they averred. In the light of increasing pressure, however, they did not completely rule out further changes in these figures.

What complicated matters for the finance minister was that apart from the SJM, even some influential BJP leaders came forward to publicly speak against the IRA bill. Opposing the bill, BJP general secretary and RSS ideologue Govindacharya said here on Thursday that the insurance bill was against the party's manifesto which clearly forbids foreign investmentin the domestic insurance sector.

Even home minister LK Advani obliquely supported the stand of the SJM when he told reporters that their reservations were valid. He said after all the BJP had opposed the insurance bill in the previous Lok Sabha.

Advani said the bill will be introduced in the Lok Sabha during this session but was likely to be referred to the parliamentary standing committee. He also said that the government would take into confidence the SJM while drafting detailed provisions in the bill.

The SJM held a day-long dharna in the Capital earlier in the day to protest against the insurance bill. Among those who participated in the dharna included JSM convenor Gurumurty, all India organising Manch secretary P Muralidhar Rao and ABVP leader Raj Kumar Bhatia.

Soon after meeting Sinha, Gurumurthy told newspersons that he had placed their viewpoint before the finance minister. He said SJM would not agree to any foreign investment in the insurance sector. His colleague Muralidhar Rao was moreaggressive. " The manch is not concerned if on this bill issue the ruling BJP splits. We would carry on our mission at any cost."

The Shiv Sena lent further strength to the SJM by indirectly supporting its stand. The sena Lok Sabha leader Madhukar Sarpotdar said the government had yet to discuss the bill with all its allies. "Without consultations, how can they expect us to support the bill?", he asked.

On the mat directly over the issue was Sinha with whom a number of leaders from different parties met in the course of the day, touching off rumours that he was likely to quit. So much so that official and political circles had to chip in to say that Sinha had the backing from the highest in the government.

It transpires, meanwhile, that the finance ministry mandarins have been readied for instant drafting of a new cabinet note on IRA bill as soon as an agreement is reached on the issue.

The IRA bill okayed a few days ago by the cabinet needed to get a fresh nod in the event of anychange.