The Karnataka government has decided to drop the controversial steel flyover project, Minister for Bengaluru Development and Town Planning K.J. George formally announced on Thursday.

He said the decision was taken after consultation with Chief Minister Siddaramaiah following city Congress MLAs' advice to the government to drop the project as the BJP was trying to cash in on allegations that the project involved a kickback of Rs. 65 crore.

Earlier in the day, Mr. Siddaramaiah also said that they don't want the steel flyover, if the city MLAs don't want it. The formal decision to drop the project would be taken in the next Cabinet meeting, Mr. George said.

The project that saw a huge civic mobilisation, which succeeded in obtaining a stay order from the National Green Tribunal (NGT), has been scrapped for “political reasons”, sources said.

Following the disclosure of what is claimed to be a diary seized by the Income Tax Department from the house of MLC Govindaraju that had several entries, including one which said “Steel bridge 65 cr.” in the received column, the project became a political hot potato, the sources said.

The decision was taken likely during a recent Congress coordination committee meeting, which saw the participation of State Congress in charge Digvijay Singh.

The sources said though the veracity of the diary was being contested, the particular entry was the only one that indicated corruption in the project, which the Congress did not want to give any credence to, sources said.

The BDA is likely to withdraw its petition in the NGT that contested the interim stay order on the project, thereby giving it a natural death.