New Delhi, Dec 27 (IANS): The Delhi government Monday decided to extend financial assistance to city power distribution company (discom) BSES to clear its dues.

Chairing a cabinet meeting, Chief Minister Sheila Dikshit announced that the government will help the beleaguered discom to get an uninterrupted power supply to avoid power cuts.

She said Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and Power Minister Sushilkumar Shinde have been apprised of the situation before taking the decision.

"We cannot allow the system to collapse. We have taken a decision (to help the discom) to ensure that power cuts do not take place in the city. We had discussed the issue with the centre before taking the decision," Dikshit said.

The government will inform power regulator Delhi Electricity Regulatory Commission (DERC) Tuesday about its decision to infuse the fresh equity.

Officials said the city government is likely to infuse fresh equity to the tune of around Rs.500 crore into the company on the condition that the discom would also infuse equal amount. The Delhi government holds 49 per cent share in BSES.

The total consumer base of BSES in Delhi is around 27 lakh.

Dikshit said to "ensure level playing field", the government would offer similar monetary help to discom NDPL even though it has not sought any such assistance.

"We will not help only one company. We will help both the discoms," she said.