The move, which was described as a "magnificent gesture" by Match Referee Mike Procter, followed a reconciliation meeting between two captains Anil Kumble and Ricky Ponting with ICC chief Match Referee Ranjan Madugalle playing the peace broker.

"From what happened with Ricky and I, we had a discussion with Ranjan and after that it was important that the game of cricket moved on.

"We decided as a team that we withdraw the charge made against Brad Hogg," Kumble told reporters, adding Hogg probably made the comment "in the heat of the moment".

"Cricket is larger than the individual and it was important that we forgot about what happened in Sydney as one of those bad moments and that it was time to move on," he said.

It was not known whether the decision to drop charges against Hogg was part of a peace deal with Ponting, nor was it clear whether the Australians would reciprocate by withdrawing the racist charge against Harbhajan.

Both captains, after the 45-minute meeting, declared the rest of the series would be played in "great spirit".

The meeting was held under a tight security cover and both the captains were seen laughing and joking together before the meeting.

Ponting and Kumble also pledged there would be no repeat of the second Test hereafter, not only in the Perth Test, beginning in Perth on Tuesday but also for the rest of the summer.

"Anil and I have just had a very productive meeting discussing a number of issues. We are really happy with the outcome," Ponting said.

"Both teams, more importantly, both captains have walked away really happy and we have decided here on this series will be played in great spirit as I think the first Test certainly was," he said.

Kumble, on his part, was more than happy to walk down the peace lane.

"It's very important cricket is played in the right spirit, it's time to move on," said the Indian captain.

Madugalle too was delighted at the spirit shown by the two captains.

"This was just one of those incidents. We are keen to have a fantastic series. It went well, both captains know they need to move forward," he said.

Madugalle was flown from Sri Lanka to smoothen out relationship between the two teams which broke down after Andrew Symonds laid a charge of racist comment on Harbhajan who, after a hearing, was banned for three Tests by match referee Mike Procter.

"We take the spirit of cricket very seriously and are determined to ensure we are not only remembered as a good team but one that is respected throughout the cricket world for the way we play," Ponting said.

"That is why I led a meeting of our team and other cricket officials, where we revisited our spirit of cricket pledge.

"We looked back at last week's game and discussed little areas where we believed we could improve things," Ponting said.

At the receiving end of a barrage of criticism for their unsporting conduct in the Sydney Test, Ponting admitted there were room for improvement.

"No-one is beyond criticism or bigger than the game.

Life's all about learning little things day by day, and it's no different playing in a successful cricket team.

"You always find little ways of improving yourself," he said.

Hogg was charged under Level 3 of the ICC Code of Conduct following allegations that he verbally abused Kumble and Mahendra Singh Dhoni in the Sydney Test.