Paes, country's number one player, has however, been compensated by being named for the mixed doubles along with Sania Mirza, thereby turning Bhupathi's desire to play alongside her.
The compromise formula worked out by All India Tennis Association (AITA) was announced barely hours before the deadline for sending entries expired.
This means that India will take part in at least three tennis events provided Sania gets a wild card entry which is expected. Wild cards will be announced by the ITF on June 28.
There was no immediate reaction from Paes, who had threatened to boycott the Olympics, if he was paired with a junior. Vardhan is ranked 206.
Paes' father Dr Vece however said, he would be disappointed by the AITA decision and it was difficult to say which way he would go.
Put in a quandary, after the three top players threatened to opt out of the mega event, AITA conceded that its decision was "not fair" in all respects but was in the "best interest of the nation".
AITA came out in wholesome praise of Paes by describing him as most patriotic player and appealed to him to partner Vardhan.
"In the given circumstances, the best option is of sending two teams. We are fully aware that Leander Paes, our great tennis player and undoubtedly the most patriotic one, who has the record of most David Cup appearances for India and has served the nation for over 25 years, had been driven to the wall and had to react sharply yesterday much against his true character," AITA President Anil Khanna told reporters.
"AITA does not want Leander's image to be tarnished. AITA now requests Leander to forgive the utterances (against him by Bhupathi and Bopanna). We request Leander to reverse his thoughts and he should help Bopanna and Vishnu to succeed in their first Olympics," he added. More
