The proposed IT township at Rajarhat near Salt Lake had become controversial in recent weeks following allegations that land sharks - allegedly backed by promoters of Vedic Realty - had been involved in acquisition of land there.

The state government depended on Vedic Realty, which set up a joint venture (Akash Nirman) with Webel, the state's key IT agency, to get land for the 1,600-acre IT project.

Both Infosys and Wipro had sought 90 acres from the state government for their ventures. Even ITC Infotech was eyeing for space in the IT hub.

Bhattacharjee reportedly told Front partners that the project had not been rejected but there was a problem with the location of the township following allegations of forcible land acquisition.