Mantralaya sources told The Financial Express that the government, which itself is reeling under severe financial crunch, was not in a position to cough up the funds sought by the MSEB. MSEB sources said that the state government would make all efforts to bail out the MSEB. "We will make the payments as and when there will be funds," these sources added.

Enron India managing director K Wade Cline and the DPC president and chief executive officer Neil McGregor admitted that the company has received a cheque of Rs 50.7 crore. "We want a long term solution," the duo said and hoped that the MSEB would pay up the balance amount also.

Mr McGregor said that the coming Monday would be a crucial day as the company would see whether the MSEB has paid up Rs 102 crore towards the December bill and Rs 127 crore towards January bill. "Anything can happen," he added.

DPC spokesperson Jimmy Mogal said that " the invocation of the state guarantee and the sovereign guaratnee will be one of the options the company may consider if the MSEB fails to meet the deadline by Monday."

Curiously, state government sources alleged that the DPC has backtracked from its promise of extending the deadline until March 25 for the payment of the December and January bills. These sources said that DPC officials during the maiden meeting with the state chief secretary V Ranganathan held on February 8 had shown their desire to do so but now have changed their mind.

However, Mr McGregor said that they had made it clear that the DPC, which had already extended the deadline until February 25, would want to regularise arrears by that time. "It seems that the government and MSEB officials assumed the 30-day extension since the date of meeting with Mr Ranganathan," he added.

Mr McGregor added that Mr Wade Cline had made the company's position clear five days ago to the government as well as MSEB. He repeated his statement that the DPC expects the MSEB to meet the deadline and make the necessary payments.