The Cabinet of Ministers has decided to back a proposal to develop the Colombo Port's Eastern Container Terminal (ECT) under the Sri Lanka Ports Authority (SLPA).

The Cabinet backed this proposal subsequent to a promise made by Prime Minister Mahinda Rajapaksa to SLPA trade unions earlier today.

With this latest development, the government has withdrawn its earlier plan to develop the terminal in partnership with India's Adani Group.

The decision made by the Cabinet is expected to end the trade union action by 23 SLPA unions against the proposed deal with the Indian business giant. Top government sources said the Cabinet unanimously approved the latest proposal over the ECT this evening.

However, it is learnt that the government is in favour of developing the West Terminal of Colombo Port in partnership with India. The Cabinet decided to appoint a sub-committee to discuss the matter with India.

However, it is still not clear as to how India will take the government's U-turn on the ECT. The project was a focal point during discussions between Indian Foreign Minister S. Jaishankar and the leaders of the Sri Lankan government.