The agreement, to be signed with three Singapore firms -National Computer Board (NCB), Singapore Network Services (SNS) and National Computer Systems (NCS) -- has been deferred due to widespread opposition.

"The agreement has been deferred pending consultations with representatives of employees in view of misconceptions over the project," official sources told PTI. They, however, did not spell out when the agreement would be put in place.

Apart from the opposition Congress, CPI and CPI(M), state government employees' associations also have raised objections to the proposed agreement to provide citizen services covering key sectors through high speed computer connectivity.

Initially, APVAN was to be introducedin six government departments including stamps and registration, commercial taxes, revenue and municipal administration.

Contending that the move would lead to large-scale retrenchments, the state NGOs association and other unions had threatened to launch a state-wide agitation if the government went ahead with the project.

The president of state NGOs Association K Ananda Mohan said the project would spell doom for the state as it would be the first step towards privatisation of government services.

"This unilateral decision of the government is not acceptable to us. We are prepared for any sacrifice to stop the project," the NGO leader said.Chief Minister N Chandrababu Naidu had last week held unsuccessful consultations with representatives of employees to convince them about the need for a mechanism for efficient and transparent services to citizens.But the government staff threatened to go on strike against the move. The issue has acquired political overtones with state Congress president YSRajasekhar Reddy alleging the project would lead to handing over state revenues worth Rs 12,000 crore to private entities.

The CPI and CPI(M) had also opposed the move on the grounds that privatisation of government services would create a deep sense of insecurity among employees.

The government, however, allayed apprehensions over retrenchments, saying the project was only aimed at providing value-added services to citizens in a cost-effective manner.

The statutory functions would continue to remain with the government and the data and back-end computers would be owned by government organisations, only the service agreements would be entered into with the Singapore consortium, officials said.

Meanwhile, a voluntary organisation has filed a writ petition in the state high court last week challenging the APVAN project.

The petitioner, PVR Bhaskar Rao, chairman of People for Economical and Effective Medicare, argued that the government was abdicating its powers by handing over its sovereign servicesto foreign companies.

Meanwhile, the state government had on February 8 signed an agreement with United Telecoms Ltd (UTL) to set up a state wide area network (APSWAN) to serve as a basic information highway connecting various departments.Under the Rs 22-crore project to be implemented on a build own and operate (BOO) basis, the state secretariat here would be linked to 25 locations across the state by May 15 through a fibre optic line providing a wide range of services including voice, video and data communications.

The APSWAN would eventually be linked to APVAN towards realising electronic governance.