The Indian government has confirmed next month's tour of Pakistan has been cancelled.

The announcement was made by sports minister MS Gill in parliament as relations between the neighbouring countries continues to deteriorate following the Mumbai terror attacks. Mahendra Singh Dhoni's side were due to visit Pakistan in January and February.

Ratnakar Shetty, the chief administrative officer of the Board of Control for Cricket In India (BCCI), said they had been notified about the government's decision although he did not rule out the matches going ahead at a neutral venue.

"No decision has been made on playing Pakistan at a neutral venue," Shetty said. "We have not planned an alternative tour as yet."

India were due to play three Tests, five one-dayers and a Twenty20 international in a tour starting mid-January.

The tour, already in doubt due to the security situation in Pakistan, was put in further jeopardy by the terrorist attacks in Mumbai last month. Before the incidents in Mumbai, the BCCI - as is normally the case - sent a letter to the government seeking permission to travel to Pakistan for the tour.

The Ministry of External Affairs had by then already refused permission for a junior hockey team to travel to Pakistan due to safety concerns. Last week, Gill said he was against the tour going ahead. Several other former India cricketers including ex-skippers Kapil Dev, Sunil Gavaskar and Sourav Ganguly had said India should not tour given the current circumstances.

BCCI vice-president Rajiv Shukla confirmed: "Due to the current political scenario and atmosphere in the country, the government has instructed us to call off the tour. The proposed tour of India to Pakistan has been called off.

"The BCCI president has already made it clear that we would go by the government's decision on the tour.

"Keeping the policy decision in mind, the tour stands cancelled."

Asif Sohail, a spokesman for the Pakistan Cricket Board (PCB), claimed Pakistan had yet to receive official notification of the cancellation.

"We can only react after we have been officially informed," Sohail said. "We have not yet received any official communication from the BCCI."

PCB chief operating officer Saleem Altaf admitted the cancellation of the tour would hurt financially. "If there is no India series obviously we gain nothing from our new television deal and lose out on other sources of income as well," he said.

The PCB recently signed a new television rights deal worth $140.5million with the Dubai-based Ten Sports. Former PCB chief Shahryar Khan was not surprised by the Indian government's decision.

"It is a disappointment, but it does not come as a surprise," he said. "We all hope that it can be rescheduled later. I know that the Pakistan Board is already making alternative arrangements."

The PCB later confirmed they had asked Sri Lanka to fill the void left by India's decision.

"Today we have sent an invitation to Sri Lanka to play three Tests, three limited-overs games and a Twenty20 international against us in Pakistan," Altaf said.