Even as Union Home Minister Sushilkumar Shinde has said the note on the creation of Telangana is likely to be placed before the Cabinet by this month-end, the government is considering giving the Union Territory status to Hyderabad — the proposed joint capital of Andhra Pradesh and Telangana for 10 years.

The move is being seen as a step to pacify non-Telangana supporters from Seemandhra and Rayalaseema, who fear that once Telangana is created with Hyderabad as its capital, their interests would get hurt. There is apprehension among the members of the business community and bureaucracy, who live in good numbers in Hyderabad and hail from these two regions, that they could be targeted after the bifurcation of Andhra Pradesh, sources in the government said.

Many of those opposing the new State feel that making Hyderabad as a Union Territory, along the lines of Chandigarh, which is the capital of both Punjab and Haryana, would safeguard their business and other interests. More vocal in their protests are leaders from the Seemandhra region, who, cutting across party lines, are opposing the bifurcation of the State.

But this is not all, as there are still several hurdles that the Centre has to clear to pacify MPs and leaders from Seemandhra and Rayalaseema regions. Even some top Congress leaders, including Chief Minister Kiran Kumar Reddy and Union Minister Kishore Chandra Deo, are opposed to the idea.

Contrary to Mr. Shinde’s statement, Home Ministry sources said there was much confusion regarding the Cabinet note on Telangana that Mr. Shinde talked about on Monday. Senior officials dealing with the issue feel that it would not be proper to submit a Cabinet note without incorporating suggestions from the three-member committee formed by the Congress.

The high-level committee, headed by Defence Minister A.K. Antony with Congress general secretary Digvijaya Singh and Sonia Gandhi’s political secretary Ahmed Patel as its members, was still deliberating on the contentious issue, the sources said. Apart from the division of Andhra Pradesh and inclusion/exclusion of some districts, the status of Hyderabad and the division of resources and bureaucracy were some of the most contentious issues.

Once the Cabinet clears the note, the government is likely to set up a group of ministers that would go into all the nitty-gritty of bifurcating Andhra Pradesh. Then the note, with all details, would be sent to the Andhra Pradesh Assembly to be passed as a resolution. Once it is done and the resolution sent back to the Centre, the government would bring a bill for the creation of new State.