The West Bengal government on Monday announced that it "cannot proceed" with the proposed joint sector Kolkata Link IT township project near Rajarhat in North 24 Parganas district following allegations of land grabbing and the recent arrest of managing director of a firm, which is a private partner.

This is a setback to the State's plans to develop the IT sector.

"The government does not want to be involved in any illegal activity. Thus the IT department cannot proceed with the project ," a release said.

"Under the circumstance, we are unable to stick to our assurance of providing land to Wipro and Infosys."

Major IT companies had already sealed agreements with the State to set up facilities in the township. The project was to have come up on 1,200 acres.