According to a press release of the Defence Ministry issued on Friday, the Ministry has initiated action for cancellation of contract for procurement of 12 AgustaWestland 101 helicopters for the use of VVIPs.

The Ministry issued a formal show cause notice to the AgustaWestland of UK seeking cancellation of contract and taking other actions as per the terms of the contract and the Integrity Pact.

The Defence Ministry had already put on hold further payments to the company on Wednesday. A show cause notice was also issued on Friday. The company has been asked to reply to the notice in seven days.

The External Affairs Minister Salman Khurshid, however, on Saturday while speaking to an English TV channel said : “, the show cause is only the first step, but the government is not committing to cancelling the deal just yet.'

On whether the matter would come up during the upcoming visit of British Prime Minister David Cameron, Khurshid said, 'Any further steps that are taken should be taken, keeping in mind, both our entitlement as far as the contracts are concerned and the implications of it for ourselves. If it is found necessary, it will be put on agenda if not, it won't.'

He said that all procedures were 'strictly followed' by the UPA government in the controversial VVIP chopper deal.

'We have attempted to get details but because of procedural issues, which continue even now, there has been a paucity of specific information on which objective decisions could be taken about an investigation,' Khurshid said.

To a question whether the names of top dignitaries like the President or Governors coming up in the matter is going effect the case, Khurshid said, 'Well, as far as I understand, certainly not, because as I said to you their involvement was entirely on the procedural side and I don't think that could have been a better and a tighter compliances as far as procedures are concerned.'

In February 2010, India had inked Rs 3,600 crore deal to acquire the 12 three-engine AW-101 helicopters from AgustaWestland for IAF's elite Communication Squadron, which ferries the President, PM and other VVIPs.

With the scam unfolding in the deal, the delivery of three helicopters from AgustaWestland scheduled for next month has been put on hold along with the remaining six which were to arrive later.

India has already received three of the 12 helicopters. A CBI team is also being sent to Italy where the CEOs of AgustaWestland and its parent company Finmeccanica have been arrested on charges of bribery.