India have suspended their cricket tour of Australia pending the outcome of an appeal against a three-match ban handed to spin bowler Harbhajan Singh.
The Board of Control for Cricket in India (BCCI) has told its players to stay in Sydney rather than travel to Canberra for a tour match on Thursday.
Harbhajan was banned for making a racist remark during their tempestuous defeat to Australia in Sydney.
He was found guilty of breaching the players' code of conduct.
It was claimed that Harbhajan called Australia's Andrew Symonds a "monkey".
Match referee Mike Procter said he was satisfied Harbhajan had used the word and that "he meant it to offend on the basis of Symonds' race or ethnic origin".
All-rounder Symonds, 32, is the only non-white player in the Australian side.
The BCCI's statement said: "The Indian Board realises the game of cricket is paramount but so too is the honour of the Indian team and for that matter every Indian.
"To vindicate its position, the board will fight the blatantly false and unfair slur on an Indian player."
Earlier, India team manager Chetan Chauhan said he believed Harbhajan had been harshly treated.
"I told the match referee this is wrong. There was no conclusive evidence from the Aussie side," he said.
Harbhajan was accompanied at the hearing by Chauhan, assistant manager Dr MV Sridhar, captain Anil Kumble and batsman Sachin Tendulkar.
If he was to lose the appeal he would miss the two remaining Tests in Australia, and one further match.
The 27-year-old has played for India since 1998 and has taken a combined total of almost 450 international wickets in all forms of the game.
He was batting with Tendulkar when the incident took place during the third day's play at the Sydney Cricket Ground.
It prompted Australian captain Ricky Ponting to complain to on-field umpires Mark Benson and Steve Bucknor, who subsequently laid a charge under section 3.3 of the code of conduct.
he section refers to the use of "language or gestures that offends, insults, humiliates, intimidates, threatens, disparages or vilifies another person on the basis of that person's race, religion, gender, colour, descent, or national or ethic origin".
The International Cricket Council says it has a zero-tolerance policy towards racism.
The decision is unlikely to improve relations between the two teams ahead of the third Test, which begins in Perth on 16 January.
It came only hours after Chauhan described the umpires as "incompetent" for making a series of mistakes and Kumble hit out at the Australian team for not playing within the spirit of the game, which India lost by 122 runs.
India have reacted to Harbhajan's ban by lodging their own complaint against Australia's Brad Hogg for allegedly making an abusive comment to one of their players, according to reports.
Cricket Australia chief executive James Sutherland, who is expecting the tour to continue as scheduled, has proposed a peace meeting between Ponting and Kumble to try to resolve the escalating crisis.
Harbhajan is the first player punished for a racist remark since South Africa's Herschelle Gibbs was suspended for one Test, one limited-overs international and a Twenty20 match in January 2007.
He was caught on a stump microphone talking about Pakistan fans.
In 2003, Australia's Darren Lehmann was suspended for five one-day matches after he was found guilty of shouting a "racially-motivated obscenity" in a match against Sri Lanka.
SOURCE - BBC