Here is the full text of the letter...
"I was delighted when Down to Earth was nominated for an Oscar. I was also pleased to have been asked to perform the song in the Oscar ceremony. However, in recent discussions with the Producers, it became clear that despite there being only three nominees, only 60-65 seconds was being offered, and that was also in a medley of the three songs. I don't feel that is sufficient time to do the song justice, and have decided to withdraw from performing.
I fully respect and look forward to the Producers' right to revamp the show. Even though song writers are small players in the film making process, they are just as committed and work just as hard as the rest of the team and I regret that this new version of the ceremony is being created, in part, at their expense."
I still very much look forward to attending the ceremony".
Read the complete post at http://www.mcnblogs.com/thehotblog/archives/2009/02/peter_gabriel_t.html