The intensification of the tussle is posing a major obstacle in the distribution of relief. Till Thursday night, the Orissa government had apparently not touched the funds released by the Centre, amounting to just over Rs 500 crore, which lay in the state's account with the Reserve Bank of India, according to highly placed sources.

The state government is insisting that the entire amount should be considered as a grant and not as a loan or an advance. This is what Congress chief Sonia Gandhi told Prime Minister Atal Behari Vajpayee when she met him with Manmohan Singh and Madhav Rao Scindia two days ago.

Of the money released by the Centre so far, Rs 250 crorehas been announced by the Prime Minsiter for relief after the last cyclone not long ago. Of this, Rs 200 crore was by way of an advance. The balance was a grant.

The Cabinet met soon after the super cyclone last week and released Rs 100 crore from the National Calamity Relief Fund, waiving all procedure.

Normally, the procedure is a cumbersome one and the Committee, headed at present by the Deputy Chairman Planning Commission K C Pant and comprising the Finance and the Railway Ministers and five Chief Ministers, processes a request sent by the affected state government which has been looked into by a Central team despatched to the state.

The Cabinet also augmented the depleted National Calamity Relief Fund by Rs 500 crore. The fund had at the time only around Rs 20 crore in its kitty. The government also sent around 1 lakh tonnes of rice at the `BPL' (below poverty line) rates which meant a subsidy of Rs 60 crore. In addition, it gave the state an advance of Rs 300 crore which would be adjustedagainst the state's share of Central taxes.

The Centre is likely to announce another Rs 100 crore from the Rural Development Ministry for the construction of roads and structures in the coastal areas.