Earlier, Chief Minister met  Congress President Sonia Gandhi.

Yesterday, CM wrote to Tamil Nadu Chief Minister J Jayalalithaa, asking her to reduce the water level in the Mullaperiyar dam, mainly for safety reasons - the structure is more than 100 years old and the region where it is located has seen several tremors lately, since July.

Tamil Nadu, however, has been demanding that the dam's water level be increased to meet its growing irrigation needs.

Ms Jayalalitha sent an acerbic reply in which she referred to "unwarranted provocations from across the border" and "the fear psychosis generated in Kerala."

In the Supreme Court, Tamil Nadu argued that the Kerala government "is spreading panic among the public about the safety of the Mullaperiyar dam which is not true." Ms Jayalalithaa has asked the court to stop officials in Kerala from commenting on the possible construction of a new dam.

But CM today reiterated that building a new dam was one of the options which should be considered. "We are ready to give full assurance to Tamil Nadu on water" he said.

"There are two limitations for the Centre. The matter is with the Supreme Court and this is a dispute between two states," he said, adding that his government is ready for discussions on the issue .

The lengthy and bitter hostility between the two states has already seen the PM's intervention. In a letter written to Ms Jayalalithaa, Prime Minister said that "nothing should be said or done to create undue alarm" over the dam.

"I am sure that, given goodwill on both sides, an amicable and mutually acceptable solution can be found through a process of dialogue and communication. I have accordingly advised the Ministry of Water Resources to arrange an early meeting between the officials of the two sides to sort out outstanding issues and allay genuine concerns," he further added in the letter.

The Kerala Assembly has called a special session on December 9 to discuss the dispute.