India's government has told the Supreme Court that it will not request the return of the 106-carat Koh-i-Noor diamond, which is now part of the British crown jewels.
In a surprise statement, India's solicitor general told the court that Britain should not have to give the diamond back.
Ranjit Kumar said the diamond had been given freely to the British in the mid-19th century by the family of Punjab's Maharaja Ranjit Singh, and had been "neither stolen nor forcibly taken by British rulers".
The court was hearing a petition filed by a rights group asking it to order the government to seek the return of the diamond.
The two-judge bench said it did not want to issue a ruling that might jeopardise a future attempt to bring back the diamond or other treasures that once belonged to India.
It told the government to take six weeks to reconsider its position before the court decides whether to dismiss the petition.
The diamond is on display in the Tower of London, set in the front of the Queen Mother's crown.
For many Indians, the loss of the Koh-i-Noor is symbolic of British colonial rule and its return is viewed as partial compensation.
The Koh-i-Noor, which means Mountain of Light, was discovered in the Golconda mines in what is now the southern Indian state of Andhra Pradesh.
The large, colourless diamond then passed between Mughal princes, Iranian warriors, Afghan rulers and Punjabi Maharajas before it was given in 1849 to the East India Company, which then offered it to the British queen.
India, along with Pakistan and Afghanistan, have long squabbled over who has the rightful claim to the diamond.
During a 2010 visit to India, Prime Minister David Cameron told local media that the diamond would stay in Britain.
"If you say yes to one (request), you suddenly find the British Museum would be empty," Mr Cameron said. "I'm afraid it's going to have to stay put."