Sources said that the President wrote to the Government this week conveying his apprehensions over the Cabinet's July 6 decision of shifting existing licence holders to a revenue-sharing arrangement.

However, the Government is believed to have written back to the President stating that it was not a new policy decision and involved only migration of existing licence holders from a fixed licence fee structure to a revenue-sharing regime as per the new telecom policy 1999.

This is the second time that the Atal Bihari Vajpayee government has snubbed the President. The Centre had earlier brushed aside President's objection to its decision of infusing fresh equity of Rs 125 crore in Indian Airlines. Narayanan had summoned IA managing director Anil Baijal over the Cabinet decision.

Sources in the Government said thatit had no plans of backtracking on the telecom package and had explained the matter to the President. "The decision was to bring existing operators on par with the new operators who will come under the new telecom policy which was well in place before the fall of the Vajpayee Government. Besides, this policy itself provided for the transition of existing operators to a revenue-sharing regime," a Government source said.

The Cabinet decision was only the culmination of a process initiated more than a year ago.

A number of Opposition parties had met the President seeking his intervention on the issue alleging that migration to revenue sharing would result in a huge revenue loss to the Government exchequer.

Narayanan had summoned previous communications minister Jagmohan on July 9 to discuss the package approved by the Cabinet. Jagmohan, a known opponent of the revenue sharing arrangement, was suddenly shifted to the urban development ministry. The transfer was widely attributed to his opposition torevenue sharing.

Two former prime ministers, Chandra Shekhar and HD Deve Gowda, have also opposed the Government's decision to do away with the licence fee structure for existing operators.

The Government has defended the introduction of revenue-sharing arrangement from August 1 on the grounds that any further delay would have lead to a dismal investment scenario in the telecom sector.

The government believes that foreign direct investment would have been affected badly. The revenue sharing regime has been hailed by the private telecom operators.