The International Olympic Committee (IOC) says Dow Chemicals will remain a sponsor at the London Olympics and that the US company was not to blame for the horrific 1984 Bhopal gas tragedy.
IOC also told the Indian Olympic Association (IOA) that its relationship with Dow Chemicals was over 30 years old, and "we were aware of the Bhopal tragedy when discussing the partnership with Dow."
IOA has opposed Dow Chemicals as one of the sponsors of the London Olympics because of its ownership of Union Carbide, from whose pesticide plant in Bhopal a lethal gas leak killed thousands on December 2-3, 1984.
IOA had asked the IOC and London Organising Committee for the Olympic and Paralympic Games (LOCOG) to withdraw Dow as a sponsor.
In a letter to IOA acting president Vijay Kumar Malhotra, IOC chief Jacques Rogge said: "IOC recognizes that the Bhopal tragedy in 1984 was horrific event for India and the world. The Olympic Movement sympathizes with the grief of the victims' families and regrets the ongoing suffering people face.
"The IOC and LOCOG were aware of the Bhopal tragedy when discussing the partnership with Dow. Dow had no connection with the Bhopal tragedy.
"Dow did not have any ownership stake in Union Carbide until 16 years after the accident and 12 years after the $470 million compensation agreement was approved by the Indian Supreme Court.
"The court has upheld this agreement twice since then, in 1991 and 2007.
"We understand this is being reviewed yet a third time by the India Supreme Court and we are aware of Dow's position in this mater, and of the sensitivities of all parties.
"We only enter into partnerships with organisations that we believe work in accordance with the values of the Olympic Movement...
"We do hope the IOA is recognizing this, while we appreciate the difficult situation you are facing in your country.
Malhotra said IOA was not convinced by the IOC's argument.
"We want that IOC should understand and appreciate the feelings and sentiments of the victims and drop Dow as sponsors."
He also wanted the Indian government to come out with a clear stand on the issue. "We are yet to receive a reply from the government while IOC has written to us."