The government, seared by the scandal referred to as "Coal-Gate", has permitted the CBI to question senior bureaucrat HC Gupta, who headed the committee that allocated mining rights to private firms through a process that allegedly cost the country thousands of crores.
NDTV reported last week that the CBI had been refused permission to interrogate Mr Gupta. The opposition accused the government of trying to shield both the bureaucrat and the Prime Minister, who held direct charge of the Coal Ministry for some of the years under investigation.
Sanction for Mr Gupta's questioning was needed because Mr Gupta is part of a government agency, the Competition Commission of India , which reports to the Ministry of Corporate Affairs. After the CBI's first request was rejected, the agency submitted a new application with more details about Mr Gupta's alleged role.
From 2006 to 2009, Mr Gupta headed a government screening committee that assigned coal mining rights. The CBI has said the group functioned without transparency and failed to conduct required background checks on firms who gave false information about their finances and technical expertise.
Sources in the CBI say that they may next seek to interrogate bureaucrats in the Prime Minister's Office (PMO). The Supreme Court recently criticised the joint secretary in the PMO, JS Shatrughan Singh, for reviewing a report prepared by the CBI and making "significant" deletions before the document was given to judges.
Ashwani Kumar was forced to resign as Law Minister last month for allegedly asking for changes to that report.
Yesterday, Coal-Gate embarrassed the Congress once again with the CBI registering a case against its MP, Navin Jindal and Dasari Narayan Rao, former Minister of State for Coal.