Mitsubishi Motors said on Tuesday it had decided to drop a project under which it would jointly develop full-sized cars with former majority shareholder DaimlerChrysler.

Reuters noted that Mitsubishi Motors, Japan's only loss-making auto maker, had said as recently as late last year that it was undecided about proceeding with the so-called D-segment project after completing joint development in the medium-sized C-segment area.

"We had always said we would continue the projects in both the C and D segments, but recently decided to cancel the D portion and develop derivative products off the C segment on our own," a Mitsubishi Motors spokesman told the news agency.

The spokesman reportedly said it was still unclear when, if ever, Mitsubishi Motors would be able to develop a new D-segment car, but when it does, it would go it alone based on the C platform shared with Chrysler.

Reuters noted that ties between DaimlerChrysler and Mitsubishi Motors have weakened since the former pulled the plug on its struggling partner last April, refusing further financial aid.

A DaimlerChrysler spokesman told Reuters his company's US Chrysler arm intended to go ahead with its D-segment plans.

"Speaking for Chrysler, there is no change in product planning and the product range. Based on cooperation with Mitsubishi, Chrysler will make products in the C and D segments," he reportedly said.

Spokesmen at both companies told the news agency all other projects such as the joint production of small-car engines, production of both companies' small cars at Mitsubishi's Dutch plant, and Chrysler's plan to supply pickup trucks under the Mitsubishi badge in the United States, remained in place.