India will continue the tour of Australia as scheduled but warned they will pull out again if Harbhajan Singh is not exonerated of directing racial abuse at Andrew Symonds.

The Board of Control for Cricket in India (BCCI) had halted the tour after their spin bowler was banned for three matches after allegedly calling the Australia all-rounder "a monkey".

However, the BCCI released a statement today that said that they will complete the four-Test tour but will pull out again if their appeal against the verdict is not upheld.

The statement said: "The [working committee] of the BCCI took note of all relevant circumstances and developments and decided the Indian team tour to Australia should continue for the present."

"The ICC has clarified to the board that Harbhajan could play until the final disposal of the appeal. This is only an interim arrangement. The BCCI is of the categorical view that the matter will have to be finally resolved and the unfair allegation against an Indian player be set aside or withdrawn."

India's withdrawal had prompted fears that cricket was about to descend into its worst crisis since Bodyline, with the touring side also furious at several contentious decisions in the second Test, which they lost on Sunday.

The ICC responded by replacing Steve Bucknor, an umpire in Sydney, with Billy Bowden for the third Test, which begins in Perth on January 16.

They have also charged Brad Hogg, the Australia spin bowler, with making an offensive remark to Anil Kumble and Mahendra Singh Dhoni during the second Test. Hogg's hearing will take place on January 14 in Perth.

However, the ICC face a difficult task to resolve the situation involving Harbhajan, who was found guilty after a four-hour hearing chaired by Mike Proctor, the match referee.

Niranjan Shah, the secretary of the BCCI, called the verdict a “blatantly false and unfair slur” while M. V. Sridhar, the India media manager, described it as “troublesome and hurtful”.

Procter was unapologetic. “I am South African and I understand the word ‘racism’,” he said. “I have lived with it for much of my life and this was not a case of just taking the word of an Australian over an Indian. I stand by my decision and believe the process was fair.”

Procter is thought to have been under pressure from Malcolm Speed, the chief executive of the ICC, to clamp down on alleged misbehaviour after finding Yuvraj Singh not guilty of dissent in the first Test.