NEW DELHI, Jan 6: Talks between India and Pakistan over the disputed Baglihar dam project ended inconclusively here on Thursday, leaving the way open for the issue to be referred by Islamabad to the World Bank for arbitration under the Indus Water Treaty, official sources said.

Pakistani officials were tight-lipped about the next step through, merely saying it was for their government to decide on future measures after studying the report from the three-day talks.

They hinted that further talks could be held yet again but only if India stopped all work on the project until the dispute was resolved. India has set a deadline on the project, officially saying it was December 2007 but also indicating that it could become operational by December 2005.

"The talks remained inconclusive," an official source close to the hectic discussions that went late into the night told Dawn. "There was a wide gap in the perceptions of the two sides on several crucial points even after three days of intensive discussions," the source said

"Our team will go back and submit the report to the government," one Pakistani official said tersely, but significantly stopping short of stating that the World Bank reference was now imminent.

Indian officials say the controversial hydroelectric project in Jammu and Kashmir fulfils the requirements of the World Bank-brokered Indus Water Treaty, a claim contested by Pakistan.

Pakistani officials say they do not mind the project as such but insist that they the project's design would enable India to obstruct at will the flow of water from the Chenab river to Pakistan.

According to official sources, India proposed continuation of talks but the Pakistan side said the future talks would be contingent on total stoppage of work on the site, till all differences were resolved in accordance with the criteria set out in the 1960 Indus Water Treaty.

The secretary-level talks after Tuesday's meeting had short-listed six technical issues to be disused on Wednesday, but they continued into the following day inconclusively.

Both the secretaries, India's V.K. Duggal and Pakistan's Ashfaq Mehmood, had told journalists that they were in the middle of discussions and resolved "to burn midnight oil" to settle the issue.

Pakistan has raised objections to the design, height, storage capacity and gates of the spillway structure of the Baglihar power plant. Sources say bringing the issue for international arbitration would imply discussing the dispute of Kashmir along with it, something that India wants to avoid at all costs.

APP adds from Islamabad: Talking to PTV, Mr Mehmood said that technical experts from both sides had participated in the meetings on Thursday to consider the objections raised by Pakistan on the project's design.

After the meeting, the experts submitted their reports to their respective sides which discussed it again in the afternoon session. Mr Mehmood said Pakistan's reservations had not been satisfactorily addressed.

Besides, Foreign Office spokesman Masood Khan told VOA that under the Indus Water Treaty, India had got limited rights while Pakistan had full rights to use the water of Chenab river.

"Our stance is that if the construction of dam project is completed in accordance with its existing specification, it will harm Pakistan's rights," he said. In reply to a question, the spokesman said Pakistan did not agree with that Indian stance that the dam was not being constructed with the aim of storing water.

"We are discussing the issue within the legal limits or technical framework which have been mentioned in the treaty itself," he said, adding that its parameters were very clear. He said the Indus Water Treaty had usually been successful and effective, but the Baglihar dam had put a sign of interrogation on it.