The Air India inquiry has been delayed until at least April 10 as lawyers for the commission and the federal government remain at odds over whether to make confidential documents public.
Justice John Major had hoped to start hearing testimony by March 19 about the activities of Canadian police and security officers in the weeks before the June 1985 bombing of Air India Flight 182 that killed 329 people -- many who were Canadian citizens.
However, the government claims that a large amount of documents must be vetted before they can be released to the public. The move is necessary to protect national security and foreign relations, and to avoid compromising an ongoing RCMP investigation, says the government.
Major and his staff have access to the uncensored documents and he has the option to proceed with the testimony behind closed doors. However, Major does not want to exclude the media and the families of the bombing victims.
In February, Major threatened to shut down the inquiry if federal lawyers didn't ease up on their secrecy demands.
In response, Prime Minister Stephen Harper ordered his national security adviser, Margaret Bloodworth, to inform lower-ranking officials to be less restrictive with the documents.
After almost three weeks of negotiations, chief commission counsel Mark Freiman said Friday that progress was being made but that disagreements continued over some documents.
He said there are 800 documents that his staff feels have been excessively censored.
Still, Freiman did note that progress has been made on about 100 of the documents in which government lawyers have agreed to the release of more information.
"The first returns are encouraging, the documents are in much more usable shape,'' Freiman reported to Major. "If that process continues, then we will be able to hold public hearings with adequate information.''
Federal lawyer Barney Brucker said the government is taking "as unrestrictive a view as we can" with the information.
"We are working industriously, we are working tirelessly, we want to make this commission a success and help you do the best job you can,'' Brucker told the judge.
Major has asked for a progress report from both sides by March 26.
While he said his aim is to resume testimony by April 10, he indicated Friday that it could take until April 17 before hearings proceed.
The commission has proceeded until now by focusing instead on testimony from academic experts, police and security officers about general anti-terrorist issues.
But the inquiry now hopes to delve into the troubled relations between the RCMP and CSIS, which is believed to have hampered anti-terrorist operations before the bombing and during the subsequent criminal investigation. The blocked documents are necessary for that testimony to proceed.
CSIS had several key suspects under surveillance long before the attack, but nobody put the pieces of the puzzle together in time to avert the bombing.
The bombing has been blamed on Sikh separatists who used British Columbia as a base to win a homeland in the Punjab region of northern India.
Inderjit Singh Reyat is the only person ever convicted, on a reduced charge of manslaughter, for his role in the bomb plot.
Talwinder Singh Parmar, the suspected ringleader, slipped out of Canada and was shot dead by Indian police in 1992. Two more men, Ripudaman Singh Malik and Ajaib Singh Bagri, were acquitted in Vancouver in 2005.
With files from The Canadian Press