India has dropped a plan to prosecute two Italian marines accused of killing two Indian fishermen under a tough anti-piracy law, a government lawyer has said.

This comes after India's defence minister, Arackaparambil Kurien Antony, on Sunday said the government would proceed with stringent actions against Italian marines charged with the killing of two Indian fishermen.

Italy had strongly opposed India invoking the law, arguing that it would amount to treating the men as "terrorists" and last week it recalled its ambassador to New Delhi in protest against the delay in the two-year-old case.

The sailors, part of a military security team protecting a privately-owned cargo ship, say they mistook the fishermen for pirates and fired warning shots into the water during the incident in February 2012, off the coast of Kerala state.

Indian attorney general Ghoolam Vahanvati told the Supreme Court on Monday that the prosecution did not intend to proceed against Massimiliano Latorre and Salvatore Girone under the anti-piracy section of the Suppression of Unlawful Acts.

"We want to delete the anti-piracy clause," he said. The men can still be tried under India's criminal laws, but the punishment there in case of a conviction is ordinarily less stringent than under the piracy law.

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The government had originally sought to prosecute the marines under the piracy law partly because the incident occurred outside the geographical area covered by the country's criminal code.

It said, however, that the sailors would not face the death penalty, which the anti-piracy law usually carries, because it has not permitted the investigation agency handling the case to invoke that particular clause in the legislation.

However, it was not clear whether a court would have had to obey this selective block.

The dispute over the marines provoked a public as well as a political outcry in both countries.

The Supreme Court on Monday said it would rule on whether India's National Investigation Agency which handles cases relating to national security should investigate the fishermen's deaths at its next hearing.

It gave no date for the next session.

The marines, Massimiliano Latorre and Salvatore Girone, had been awaiting trial on charges of murder. Their Indian lawyers say their clients mistook the fishermen for pirates and fired warning shots into the water.

The two marines do not admit to killing anyone or aiming directly at the fishing boat.

Source: Agencies