MUMBAI: Under strong protests from European regulators, EMI Group PLC and Time Warner Inc. scrapped their $20 billion music joint venture but pledged to try and resurrect the deal later in a more agreeable form.

On Thursday, the two companies withdrew their application to the European Commission for permission to merge their music arms, stating they wanted more time to tackle objections to the tie-up.

European Commission (EC ) competition officials were concerned that the tie-up between EMI and Time Warner?s Warner Music subsidiary would have placed 80 per cent of Europe?s recorded music business in the hands of just four global giants.

The companies proposed selling record labels, music catalogues and distribution networks to meet the commission?s concerns and even considered selling off Virgin Records and Chappell Music, in an effort to meet the concerns.

The EC said that last-minute, informal concessions proposed by the companies were too late to be considered and were not enough to ease their concerns. However, the regulatory body said that it would consider a new, modified proposal if the companies submitted one.

Setting the venture aside sparked renewed hope that America Online?s (AOL: Research, Estimates) $130 billion purchase of Time Warner (TWX: Research, Estimates) now stands a better chance of gaining the approval of the European Commission.

The Federal Trade Commission has said it wants to see AOL and Time Warner agree to share their high-speed cable networks.