Radico Khaitan, India's second largest spirits producer, has said it will block Diageo from taking full control of the two firms' joint venture.

Radico Khaitan said this week: "The shareholding pattern in Diageo-Radico Distilleries is not to be altered and Diageo Highlands BV and Radico Khaitan will continue to have 50:50 stake in the JV."

The Diageo Radico JV last month received the nod from the Indian Government for Diageo to take a 100% stake in the venture.

However, the Government clearance comes with a rider called Press Note 1 of 2005, under which any foreign company operating in the country through a joint venture has to seek a no-objection certificate from its Indian partner before investing in other firms in the same segment.

A Diageo India spokesperson declined to comment to just-drinks on the issue.

Last year, talks on a tie-up between Diageo and India's United Spirits broke down.