NEW DELHI // The formation of India's new counter-terrorism agency, meant to fix the major failings exposed by the Mumbai attacks of 2008, has been shelved just days before it was to be launched, in yet another embarrassing climbdown for the government.
The commando-style attacks on the business capital in November 2008 by Pakistan-based militants were a major embarrassment for the Indian security forces.
It took almost 10 hours for India's premier rapid response unit, the National Security Guards, to reach the scene. For several hours, they were stranded at a Delhi airport without a plane.
Police and paramilitaries in Mumbai were so ill-prepared for an extended attack that many refused to engage the insurgents who targeted several locations across the city and began a three-day stand-off in the historic waterfront Taj hotel.
Officers were given bulletproof vests that could not withstand shots from an AK-47 or AK-56 assault rifles, leading to the death of Anti-Terrorism Squad chief Hemant Karkare when a bullet from one of the attackers pierced his vest.
A chaotic response from the government meant there was no coordination between agencies and uncontrolled press announcements added to the panic and gave away valuable information to the attackers.
All this was supposed to be solved by the creation of a National Counter-Terrorism Centre (NCTC), announced by home minister P Chidambaram a year after the attacks.
Its role, he said, would "include preventing a terrorist attack, containing a terrorist attack should one take place, and responding to a terrorist attack by inflicting pain upon the perpetrators".
But state governments have vigorously protested the lack of consultation. Fourteen state chief ministers wrote to the government complaining that the NCTC's powers of arrest and seizure would infringe on their rights to manage issues of law and order.
Just three days before the NCTC was due to start, Mr Chidambaram announced on Monday the project was being postponed.
In his letter to the home ministry, Bihar's chief minister, Nitish Kumar, summed up their position.
"Where is the need ... to create new centres like NCTC with provisions which arbitrarily trample upon the existing constitutional safeguards to protect the highly delicate balance of power between the centre and the states?" he asked.
In India, there are no federal crimes. The federal government is only allowed to intervene in security situations when it is invited by state governments.
There is a political edge to the dispute. Recent weeks have seen increased talk in the local press of a "third front" being formed by regional chieftains, including Naveen Patnaik in Odisha and J Jayalalithaa in Tamil Nadu. They are unlikely to seriously challenge the two leading parties at the centre - the Congress and the Bharatiya Janata Party (BJP) at a general election.
But the powerful grip they hold over their states is in stark contrast to the dithering, graft-ridden image of the federal government, and they are increasingly willing to challenge New Delhi.
They have helped block several key reforms, including a proposed anti-corruption watchdog and plans to introduce foreign investment in retail.
Despite their political motives, experts say opposition to the new counter-terrorism agency is well-founded.
"Constitutional rules cannot be renegotiated in this informal way," said Ajai Sahni, director of the Institute for Conflict Management, a New Delhi think-tank
"You may have the best of intentions in giving increased powers to the central government to deal with terrorism, but tomorrow you may have a nasty regime in the centre which wants to abuse these powers and start arresting whoever it wants, and it will have the legal cover to do so."
It is also far from clear the NCTC would have brought any significant improvement in counter-terrorism. "Nothing you do at the top level will help unless you have enough ground intelligence. There is a much more pressing need to improve the quality of local forces," said Wilson John, a terrorism analyst with the Observer Research Foundation in Delhi.
The powers of the NCTC had already been significantly diluted since it was first put forward, thanks to a bitter turf war between the home ministry and other security agencies.
Pressure from the Intelligence Bureau, India's domestic secret service, meant the original plans to have the NCTC as a stand-alone agency had to be scrapped. The version that emerged in January was no more than a department within the IB.
Meanwhile, a string of bombings, including attacks on Mumbai and Delhi last year, remain unsolved.
The bombing this month of an Israeli diplomat's car in New Delhi, suspected to be the work of Iranian agents, reinforced the impression that India is a soft touch for terrorists.
"Nothing the government has done is addressing the emerging threats within the country or from the neighbourhood," said Mr John.
Mr Chidambaram says the NCTC is not dead yet. He will meet chief ministers and police heads from on March 10 in a bid to convince them about the proposal.
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