Industry sources said both ITC Hotels and the Ansals are in an advanced stage of negotiations and the contract may be signed in the next few weeks.ITC Hotels is also understood to be exploring the possibility of picking up equity stake in the project. The estimated cost of the hotel project is over Rs 150 crore.

ITC Hotels managing director SSH Rehman could not be contacted as he was not in town but a senior company official, while not denying the talks, said "It is a little premature to comment on the issue." Ansal group chairman Sushil Ansal was not available for comments.

Off late, ITC Hotels has shown interest in acquiring hotel properties as part of its over Rs 2,000-crore expansion plan. The company has been exploring several options in this regard,said sources close to the company.

The real estate and construction group, Ansals, had also been scouting for buyers to offload their substantial stake in the hotel. Interestingly, though Marriott International were keen to invest in the project, the Ansals had not shown any positive response to give it any equity holding, sources said. "We would like to have the option of changing our franchise and management partner if we so desire. If the franchisor is given a stake in the project, this may not be easy", a company official had said.

The Ansals are also believed to have broken off their private placement deal with the foreign leisure equity fund, Vickers Ballas for which the group had been negotiating a deal to offload 25 per cent stake in the hotel project.

Vickers were supposed to invest about Rs 20 crore in the holding company, Ansal Hotels, to pick up the 25 per cent equity. The Ansals had also announced ambitious plans for a foray into the hospitality industry with the tie-up with Marriott. Thegroup had announced its entry into the business of building star hotels, both in the three-star and five-star category, services apartments, clubotels and clubs.

The over $ 10 billion Marriott group manages over 1,500 hotels in 25 countries and has acquired well-known hotel brands such as the Ritz Carlton, Ramada, Renaissance and the New World Hotels.