"The CGD has been a kind cashier in the past few months, which may cause some liquidity problem over the period," Thanong said.

The maximum three-day period of government defrayal should be extended to seven days to ease the liquidity status, he said.

CGD director-general Bunsak Chiampreecha said the liquidity problem would be over by the start of June because the government would have collected all taxes and all state-enterprise agencies would have sent their annual revenues to the government by then.

He said the government had been burdened by high spending earlier this year because they had to fund projects they committed to in the previous fiscal year.

Despite tight liquidity, the government has fiscal reserves for a minimum of 14 days, which is sufficient for its fiscal stability, he said.

Funds available under government loans and government student loans can be temporarily used if the government was having a hard time finding money, he added.

Both officials were responding to a Democrat Party statement alleging that the Thaksin administration was facing a serious fiscal problem.

Bunsak said the claim that the government still owed contractors more than Bt10 billion was false.

Deputy Finance Minister Varathep Ratanakorn, also rejected the statement, saying it was impossible that some contractors had not been paid for six months because the CGD regulations require the payment to be made in three to seven days.

He said the Bt2 billion set aside for the general election on Sunday would come from the fiscal

2007 budget, therefore it would not affect this year's budgetary plan.