That too wasn't enough. Joshi, who was asked to clarify his stand by Prime Minister Atal Behari Vajpayee, refused to believe that the World Bank funding of Rs 500-600 crore would come with no conditions. Ministry officials say Joshi finally gave his assent only when the World Bank relented on its insistence that there be uniform progress in all sectors, which they say amounts to fiscal restructuring.

Officials say Joshi is firmly opposed to foreign funding in education because he feels it will be an assault on the nation's cultural fabric.Andhra Pradesh Government officials say Joshi is seeing demons where none exist. ``The Chief Minister had negotiated this loan directly with the World Bank in June-July but because the education project involved a 30 per cent contribution from the State government, he wanted it to be made a Centrally-sponsored scheme, where clearance from the Centre becomes mandatory,'' says an official.

This made Joshi see red, especially as Ministry officials say Naidu had initially wanted the Centre to negotiate with the World Bank on his behalf for the $ 530-million Andhra Pradesh Economic Restructuring Programme which, in its totality, involves restructuring in health, nutrition, rural roads, irrigation and public sector enterprises.

But Naidu finally negotiated the loan on his own and then came back to the Ministry, asking that it be made a Centrally-sponsored scheme. But when approval was not forthcoming, Naidu apparently was in no mood to keep the education project pending for want of Central clearance. Work isalready underway on 25,000 school buildings in rural areas. As an Andhra official put it: ``If the Centre had not assured us part funding, we would have raised finances from our own sources.''

But Naidu's persistence with Vajpayee and Joshi paid off. He had met the Prime Minister on two occasions as well as Joshi in October and November.