A senior government official told reporters here on Thursday that Posco might shift to Karnataka, which was making active overtures to the Korean company.

This gives a new twist to the ongoing tussle between the Ministry of Environment and Posco.

The Ministry had recently asked Posco to stop work in Orissa, where the company has been trying to start operations for many years.

Asked about the delays and Posco's predicament, the official said Posco “had no option but to wait… Where else will it get 600 million tonnes of high grade ore?

He said the Koreans understood the issue involved, but would consider the Karnataka option.