The MSEB, which had earlier paid Rs 74 crore, paid the balance amount from the funds released by the state government through its supplementary budget. The MSEB has cleared its arrears on the eve of a crucial meeting of a dispute panel which will go into the details of non-payment of arrears. ``We have settled the November bill on Monday which was partly through internal accruals and partly from the state government,'' a senior MSEB official said.

It was, however, not clear why the MSEB decided to pay the bill as earlier the state government had maintained that it was firm on withholding payment as the power purchase agreement with Enron was detrimental to its monetary interest.

Asked about the payment of Rs 152 crore bill (about $33 million) for December and Rs 112 crore for January 2001, the MSEB official said, ``We will have to find a way as there was still time for it.''

When contacted, Union power secretary AK Basu confirmed the payment by the MSEB and said as a consequence of this, there is no immediate need for invoking the counter-guarantee by Enron.

From January 16, 2001 till date, the MSEB has paid the Rs 148 crore November bill in seven instalments.