The last week of the monsoon session of Parliament looked set for a washout as the Congress-led UPA government and the BJP continued on their collision course with both sides refusing to bend from their respective positions on the coal blocks allocation controversy.

While the BJP insisted it will not allow Parliament to function till all the 142 coal blocks allotted by the UPA government are cancelled, the ruling combine rejected this demand, stating it was not based on sound logic.

"The demand for cancellation of all 142 coal blocks allocated after 2004 is not founded on sound logic...It cannot be done through diktat or arbitrary orders," Finance Minister P Chidambaram told media persons today, adding that there is a procedure to be followed in such cases and that procedure is underway.

Chidambaram also described the BJP’s demand for Prime Minister Manmohan Singh’s resignation as “outrageous” and appealed to the principal opposition party to debate the coal controversy in Parliament and not on television studios and in party offices. “It is only through a face-to-face debate that clarity will emerge,” he said.

Referring to the action being pursued against defaulters, he said, the CBI is enquiring into possible irregularities in the 57 coal blocks allotted to private parties and mentioned in the CAG report. Chidambaram pointed out, an inter-ministerial group (IMG) is also scrutinising those cases where no mining has commenced so far. The IMG, which met today, has been asked by the Prime Minister’s Office (PMO) to take a final view on all these cases by September 15. “The government has done what was needed to be done,” he said.

UPA sources said it was not possible to accept the BJP’s demand on cancelling all coal blocks as it would be tantamount to admitting that its policy on coal blocks allocation was faulty.

Chidambaram was fielded today to defend the government as part of the ruling combine and Congress party’s strategy to counter the BJP campaign on ‘coalgate’. Senior ministers and party leaders, who have been briefed on all the aspects of the coal blocks issue, are being encouraged to put across the government’s viewpoint at every available fora. The strategy was firmed up before Congress President Sonia Gandhi went abroad last Saturday for a medical check-up.

Chidambaram gave details of the allocations made since 1993 to underline that are several cases among the defaulters which were cleared by the NDA government. He said of the total allocations made since 1993, 30 blocks have started production while another 17 will commence work shortly. Another 58 blocks are located in “no go” forest areas, an issue which needs sorting out and could “go either way”. There has been unsatisfactory progress in 32 other blocks ( of these seven were allotted before 2004) and have been been cautioned about it. Show cause notices have been given to owners of 58 blocks cases, of which five were cleared before UPA came to power