The 90-minute meeting assumes importance as it comes soon after Fernandes was appointed BJP-led coalition's co-ordination committee convenor.

Never before have the two leaders had such long interaction which centered mainly on current political situation. It is not known whether George mooted the idea of the TDP joining government for added stability but Naidu has not been giving a favourable impression.

Naidu feels there is no immediate threat to BJP-led coalition government's stability. This, despite AIADMK chief J Jayalalitha's statement about her party keeping options open on possibility of tie-up with Congress in the future. Congress chief Sonia Gandhi had welcomed Jayalalitha's statement.

Fernandes and Naidu also discussed the defence land in Hyderabad whereencroachments had taken place. Since a firing range is in the vicinity of this land, the state government has proposed alternative land for defence establishments.

Fernandes, whose sympathies lay with Naidu's rival Lakshmi Parvathi earlier, was one of the first to welcome the TDP chief's decision to give outside support to the Vajpayee government.

Naidu also met Prime Minister AB Vajpayee this morning where political issues and the pending projects of the State government came up for discussion. He also briefed Vajpayee about the informal meeting of the task force on information technology of which he is chairman and wanted the government to clear the policy in respect of private internet service providers.

The CM also had discussions on the annual Plan size of the State government with Planning Commission Deputy Chairman Jaswant Singh. The Plan size for the year 1998-99 was fixed at Rs 4,678 crore which reflects an increase of 31.5 per cent over the implemented Plan of Rs 3,557 crore last year.

ThePlanning Commission assured Naidu that it would help his government to cover its counterpart share in respect of externally-aided projects which are outside the Plan.

Singh also agreed to allocate additional market borrowing of Rs 400 crore and an additional Central assistance of Rs 103 crore under the Gadgil formula to the State. He also allocated Rs 200 crore under the Rural Infrastructure Development Fund.