After the Centre decided to carve out Telangana state from Andhra Pradesh, there has been a major controversy regarding the status of Hyderabad.

The United Progressive Alliance (UPA) leadership is said to be considering various options including making Hyderabad a Union Territory, on the lines of Chandigarh, to resolve the tangle.

According to sources, a draft cabinet note on Telangana road map, prepared by the Union Home Ministry, lists out three options, namely Making Hyderabad a Union Territory and combined capital for Telangana state and the remainder of Andhra Pradesh; Combined capital for two states for a period of 10 years after which it would be the permanent capital of Telangana while a new capital would be built in the Seemandhra with financial support from the Centre; Capital of Telangana with law and order and land management to be controlled by the Union Government.

Sources said the draft note would be placed before the Congress Core Committee for approval, after which it go to the cabinet. Since the Congress Working Committee decision on 30 July  to carve out Telangana state, the other two regions—Rayalaseema and coastal Andhra, jointly referred as Seemandhra, have been in the grip of a mass agitation protesting against the division.

At the crux of the dispute between Telangana protagonists and integrationists is the future status of the 423-year-old Hyderabad, the main growth engine of the state ever since its inception in 1956.

While endorsing the plan to bifurcate Andhra Pradesh, the Congress Working Committee said that Hyderabad would be the common capital for Telangana and the remainder of Andhra Pradesh for a period of 10 years, after which it would become the permanent capital of Telangana.