Opposition legislators have staged noisy demonstrations in the Indian parliament after a draft report from a government auditor said the country had lost up to $211b in revenue from selling coalfields too cheaply.

Thursday's uproar added to pressure on Manmohan Singh, the prime minister, after months of scandals and policy missteps.

The prime minister's office called the estimated loss "exceedingly misleading," after the report - leaked from the federal auditor and published in the Times of India newspaper - prompted calls for an explanation and rattled investors.

The leaked draft from the Comptroller and Auditor General's (CAG) office criticised the allocation of 155 coalfields to about 100 private and some state-run firms between 2004 and 2009, questioning why they were not auctioned off to the highest bidder.

The firms mentioned include a subsidiary of the world's largest steel maker, ArcelorMittal, whose shares were trading down 3.2 per cent in Amsterdam.

"This is the mother of all scams," said Venkaiah Naidu, a senior leader in the opposition Bharatiya Janata Party."The prime minister should reply," he said.

'Embarrassment'

Singh himself, who oversaw the coal ministry during some of the period covered in the report, made no comment during a parliamentary appearance earlier in the day.

The published excerpts of the coal sale report have so far stopped short of direct graft accusations against Singh.

The draft said the policy undervalued the coal by at least 10.7 trillion rupees, or $211bn at today's exchange rate.

The auditor later backed away from the loss calculation and said its thinking had changed.

In a letter to the prime minister on Thursday, the auditor described the low-priced sales as an "unintended benefit" to companies that did not mean an equivalent loss to the exchequer.

"The leak of the initial draft causes great embarrassment as the audit report is still under preparation. Such leakage causes very deep anguish," the auditor said.

The letter was quickly tweeted by Singh's office.

Singh first faced criticism two years ago when his government was accused of graft in the sale of the nation's telecommunication spectrum. Those allegations led to the cancellation of licenses. The telecoms sale may have cost the government up to $36bn.

Those charges led to huge street protests and landed a minister and several company executives in jail.

India is the world's third-largest coal producer after China and the United States, but output has struggled to keep up with consumer demand for electricity.

Source: Agencies