New Delhi, Mar 30 (IANS): Jammu and Kashmir's policy to rehabilitate surrendered militants did not work in the case of Sayyed Liyaqat Ali Shah but the state was not at loggerheads with the central government on the issue, Chief Minister Omar Abdullah said Saturday.

The Jammu and Kashmir Police had earlier said that Shah was returning home to the Kashmir Valley via Nepal from Pakistan last week to surrender under the rehabilitation policy but Delhi Police arrested him for planning a terrorist strike.

"In this instance the policy has not worked. But you have to put it into perspective," Omar told CNN-IBN channel in an interview.

"Given the complete divergent point of view of Delhi Police and Jammu and Kashmir Police, we needed an objective organisation to look into the facts and tell us the truth behind the whole matter," he said.

Abdullah denied the state was at loggerheads with the centre on the issue.

"I don't think so. It's Delhi Police and Jammu and Kashmir Police that have given divergent views. The government of India has not taken a position on this. They have done the right thing by handing it over to the NIA. We are not on cross-purposes with the centre on this," he said.

The state government announced an ambitious rehabilitation policy in 2010 to encourage Kashmiri youth living in Pakistani Kashmir to return home and live a normal life after abjuring violence.

Under this policy, over 200 former militants have returned, most of them with their families. Most of the surrendered militants have Pakistani spouses who also chose to come to Kashmir along with their husbands and children.

The state government claims that these former militants have been given monetary incentives and provided security cover, but the "beneficiaries" deny this.

Abdullah also downplayed Samajwadi Party chief Mulayam Singh Yadav's Third Front suggestions and said the National Conference (NC) and the Congress would decide on their alliance for 2014.

"I've no idea on what Mulayam Singh Yadavji is predicting that but I will not go with that. We have to wait for the electoral results to see," said Omar.

"It's for both the NC and the Congress to decide (on their alliance). The NC has authorised its president Farooq Abdullah to take a final view on this. It will require some discussion between him and the Congress high command," he said.

According to Abdullah, the central government's decision not to return the body of parliament attack convict Afzal Guru, who was hanged and buried in Tihar jail in February was unfortunate.

"I think it's unfortunate. Having hanged him and the way we did, having denied his family a final meeting...," said Omar.