By Divya Rajagopal & Raksha Hegde/CNBC-TV18

It was supposed to be the Tata's biggest investment in Tamil Nadu, but the titanium dioxide project in Tirunevelli has been stalled yet again.  This time, it's because acquiring land is proving to be too costly for the Tatas.

This was where the Rs 2,500 crore mining plant of the Tatas was to be set up. But now the Tatas have shut down their office at Tirunenveili district of Sathakulam, the reason is that the company is struggling to acquire land. Till now, the Tatas have acquired only 25 acres of land, for their 10,000-acre project.

According to sources, Tata Steel stopped its efforts to buy land in the beginning of this year due to a series of problems such as the new mining policy, which disallows states from purchasing land for corporates. This has left them with no option but to negotiate with the landowners, who are quoting exorbitant prices. Also, most landowners do not have proper land patta's or documents, which may prove a legal hassle.

The stalling of the project comes as a major blow to the Tatas who had signed an memorandum of understanding, or MoU, with the Tamil Nadu government in 2007 to set up the plant. For the Tatas, this project is important because there are no manufacturers of titanium dioxide in the country.

Tata Steel seems keen on taking the project ahead, but after the Singur and Nandigram episode, they are making sure they don't caught in controversial tangle over land.