Efforts to forge a $24 billion pact between the largest mobile operators in India and sub-Saharan Africa collapsed last night after the South African Government refused to endorse the deal.

Bharti Airtel of India and MTN Group of South Africa had been locked in exclusive negotiations since May, when they revived merger talks that had already failed once, a year earlier. The talks, aimed at creating a new industry behemoth with 200 million subscribers across fast-growing emerging markets, were originally set to end on July 31, but had been extended twice.

The tie-up would have created a mobile giant with $20 billion in annual revenues, drawn from India, Africa and the Middle East. It would also have been the world's biggest cross-border deal this year, creating the world’s third-largest mobile group by subscriber numbers.

The parties failed, however, to overcome fears in South Africa that MTN risked losing its national identity – even after the Indian Prime Minister, Manmohan Singh, met the South African President, Jacob Zuma, on the sidelines of the G20 meeting in Pittsburgh last week in a bid to assuage those concerns.

Bharti executives did not rule out the deal being revived in the future. However, bankers said the intransigence of Mr Zuma's administration could now dissuade other possible suitors, such as China Mobile and Reliance Mobile of India, from making a move for MTN.

Bharti, controlled by the Indian billionaire Sunil Bharti Mittal, said in a terse statement that the deal “was a vision based on solid fundamentals” which would have cemented relations between India and South Africa.

It added: “This structure needed an approval from the government of South Africa, which has expressed its inability to accept it in the current form. In view of this, both companies have taken the decision to disengage from discussion.”

However, the tie-up had also faced regulatory concerns in India over a proposed dual listing, a proposal tabled by South African officials that would not have been allowed under current Indian rules.

Under the initial terms outlined in May, MTN and its shareholders would have taken a 36 per cent stake in Bharti while the Indian company would have held 49 per cent of MTN. The transaction would have been worth about $24 billion.

It is thought Bharti had increased the cash component of its offer for that 49 per cent stake to $10 billion from $7.6 billion, and had proposed to pay $4 billion in stock, 7 per cent more than it first offered.

Analysts had suspected that those sweeteners were not going to be enough. Despite New Delhi’s positive stance, India last week amended its takeover rules, requiring a company buying 15 per cent of an Indian firm through American depositary receipts or Global depositary receipts, with voting rights, to make an offer for a further 20 per cent.

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