By Duncan Mackay in Lausanne
Pakistan hopes it has done enough to avoid being suspended by the International Olympic Committee (IOC) - a decision which would have had serious repercussions for its participation at this month's Commonwealth Games in Glasgow - after its Government announced it would back the Pakistan Olympic Association (POA).
Pakistan has been teetering on the brink of suspension since Syed Arif Hasan was re-elected President of the POA for a third term in February 2012, a decision criticised by the country's army, who were backing a rival, Akram Sahi, from the Athletics Federation of Pakistan.
Since then two parallel Olympic governing bodies have been operating in Pakistan, one under Arif Hasa recognised by the IOC and another run by Akram Sahi, which had the backing of the Government but no-one internationally.
The IOC had repeatedly warned the Government in Lahore that unless it dropped it support for the rival organisation and which was championed by the Pakistan Sports Board (PSB), a Ministry of Education controlled agency which oversees all sport in the country, and backed the POA led by Arif Hasan then it would be suspended.
Syed Arif Hasan's election for a third term as President of the Pakistan Olympic Association in 2012 had sparked the crisis after the army had refused to back him ©AFP/Getty Images
Now, following talks here last month, Prime Minister Mian Nawaz Sharif.has decided they should support the POA, the IOC recognised body in Pakistan since 1948 having been set-up shortly after the country gained its independence.
If the Government had refused to back down in the row, they could have been suspended by the IOC's ruling Executive Board, which is due to hold three days of meetings here from tomorrow.
Suspension would have put in jeopardy the country's participation at the Commonwealth Games, which are due to open in Glasgow on July 23.
"The Prime Minister has directed us to take a decision in the best national interest so that Pakistan's sports are not affected at the international level," said Inter Provincial Coordination (IPC) Minister Riaz Hussain Pirzada
"So we have taken this decision in the best interest of the country and to secure the future of 66 percent youth of the country.
"Similarly, only those National Sports Federations which are recognised by their international bodies will be recognised by the Government."
Last October the Government had refused to take part in the Queen's Baton Relay for Glasgow 2014 because the Commonwealth Games Federation only recognise National Olympic Committees sanction by the IOC.
The event was organised by the POA and the Baton was carried by Arif Hasan.
The Government have also unfrozen the POA's bank accounts and the PSB has withdrawn a demand that Olympic House in Lahore be handed over to them.
Police in Lahore were preparing to enter the building to force the POA to give control to PSB officials.
"Since the recognition and affiliation of an NOC in a country is the sole prerogative of the IOC and IOC recognises POA headed by Arif Hasan, any notification, letters or circulars previously issued against or contrary to this recognition of POA headed by Arif Hasan as valid POA are hereby withdrawn and stand cancelled with immediate effect," the Government-backed PSB wrote in a letter sent to the Lahore police, which has been seen by insidethegames.
"The POA is the legal custodian of the Olympic properties in Pakistan.
"As the letters referred above are hereby withdrawn, the possession of the Olympic House in Lahore may be immediately handed over to POA headed by Arif Hasan,
"The bank accounts of POA where in funds retained and used are remitted by the IOC/OCA (Olympic Council of Asia) and other international bodies for the operations of POA belong to IOC.
"As per understanding any bar on the operation of bank accounts is unnecessary and uncalled for.
"The Pakistan Government explains this position to the concerned banks to ensure the said bank accounts are operated only by the authorised bodies.
"These instructions are issued without prejudice to any court proceedings and orders of any legal forum."
A threat to seize the Pakistan Olympic Association's headquarters in Lahore has been lifted after the Government decided to recognise them ©POA
In a separate letter sent to Arif Hasan - and also seen by insidethegames - the PSB undertake to work in cooperation with the POA.
"The recognition and affiliation of an NOC is the sole prerogative of the IOC as provided in the article 25 of the Olympic Charter," said the letter.
"The elections organised by the Interim Committee referred in the above letter whereby Major Gen Akram Sahi was elected as the POA chief have not been recognised by the IOC.
"Instead, the IOC continues to recognise POA headed by Arif Hasan.
"So the above mentioned letter is withdrawn in term of position explained above.
"The Pakistan Sports Boardwill now deal with POA headed by Arif Hasan as recognised by the IOC."
The Indian Olympic Association, Pakistan's neighbours, had been suspended by the IOC Executive Board in December 2012 and only had the ban lifted halfway through this year's Winter Olympics in Sochi.
But it meant that India's athletes had to walk at the Opening Ceremony under the Olympic flag and not their country's.