British American Tobacco (BAT)'s planned China cigarette plant headed towards murkier waters yesterday, with a second mainland government agency in as many days denying that it had approved the proposal. The National Development and Reform Commission (NDRC) said the project needed its approval before being considered a done deal. 'We didn't approve it,' NDRC official Wang Wei said, indicating there was no intention to support the proposed plant. NDRC's refutation is the second by government agencies in the past three days, despite BAT's insistence that the plant has been approved. The State Tobacco Monopoly Bureau, which ranks lower in the government hierarchy but is in charge of granting the licence, said on Thursday that it had not given the go ahead for the US$1.5 billion joint venture. BAT yesterday reiterated the project had been approved by the State Council, to which the NDRC reports. The world's second-largest cigarette manufacturer, which makes brands such as Lucky Strike, Kent, Dunhill and Pall Mall, said last Friday that it had secured State Council approval for the mainland plant to be built as part of a joint venture with Hong Kong-registered China Eastern Investments. China Eastern Investments could not be reached for comment yesterday. BAT said it would set up a new factory to produce 100 billion cigarettes a year. The deal is particularly sensitive given that the industry, where Chinese makers still hold a monopoly, is a big source of tax revenue for central and local governments. China's tobacco market is valued at about US$2 billion, according to industry estimates.