WASHINGTON — A United Arab Emirates-owned company said Thursday it would give up its management stake in a controversial ports deal that has taken Washington by storm and has caused massive upheaval in the president’s own party.

The Thursday announcement came just hours after Republican leaders warned President Bush that the House and Senate appeared ready to block Dubai Ports World from taking over some terminal operations at six U.S. ports.

“Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity,” DP World’s chief operating officer, Edward H. Bilkey, said in a statement, read on the Senate floor by Sen. John Warner, R-Va.

The company said its decision was “based on an understanding that DP World will have time to affect the transfer in an orderly fashion and that DP World will not suffer economic loss.”
…
“This should make the whole issue go away,” said Senate Majority Leader Bill Frist, holding up a copy of the DP World press release that announced the U.S. ports concession.
…
A senior Frist aide told FOX News that the Senate majority leader and his staff informed DP World and UAE government officials Wednesday night to pull the plug on the deal. When asked what prompted this action from Frist, the aide said the House action Wednesday night created a “destabilized coalition among House and Senate GOP.”

Just one night before, GOP-led House Appropriations Committee passed a bill blocking the deal. Bush has vowed to veto any measure halting the deal.

By attaching it to a larger must-pass $91 billion spending bill, lawmakers are challenging Bush: If he follows through on his veto threat, he would also be vetoing the entire package.
…

…
The deal in question, however, focused primarily on lucrative Asian markets. DP World valued its rival’s American operations at less than 10 percent of the nearly $7 billion total purchase.
…

…
Democrats are pushing an amendment to lobbying reform legislation to ensure that no UAE-related company has any control over U.S. port operations, particularly since so few details of the latest DP World plan is known. The amendment, sponsored by Sen. Charles Schumer, would not only block the Dubai deal, but also other U.S. ports deal with any company wholly owned or controlled by any foreign government that recognized the Taliban in Afghanistan from 1996-2001.
…