The proposal may come up at tomorrow's meeting of the Cabinet Committee on Security headed by Prime Minister Manmohan Singh.
The proposal to take out the NCTC, a pet project of Home Minister P Chidambaram, from IB was taken after the Centre faced strong opposition to NCTC from Chief Ministers at a specially convened meeting on May five.
According to the earlier proposal, the Multi Agency Centre and the operations wing of the Intelligence Bureau were earmarked for the NCTC and the Home Ministry had passed an ordinance making the new anti-terror body as a nodal organisation under the Unlawful Activities (Prevention) Act.
This had faced strong opposition from Chief Ministers like Naveen Patnaik (Odisha), J Jayalalitha (Tamil Nadu), Narendra Modi (Gujarat) and ally Mamata Banerjee (West Bengal). The Home Minister had announced on May five that the Centre will have a relook and may make NCTC an independent body.
According to the sources, under the new proposal that will be submitted to the CCS tomorrow, the NCTC will function in tandem with the state police and no arrests would be made without notifying the nearest police station, another contentious issue for the states which had said that such powers will hurt the federal structure of the country.
Yesterday, addressing a press conference in Bangalore, Chidambaram had said the government was addressing the two issues -- NCTC's operating under Section 43 (A) of the Unlawful Activities (Prevention) Act, which gives power to arrest to central sleuths and its existence under IB.
He had also said that a note on the NCTC was being circulated among the CCS members for their consideration.