New Delhi: The Naveen Patnaik government scored a major victory with the Centre on Tuesday deciding to set up a tribunal to settle the dispute over sharing of Mahanadi water between Odisha and Chhattisgarh.

Following Supreme Court's criticism, the Union cabinet's meeting, which was chaired by Prime Minister Narendra Modi, approved Odisha government's request for a tribunal under Inter-State River Water Disputes (ISRWD) Act, 1956.

Odisha had complained that the "unilateral" construction of dams by the BJP-ruled Chhattisgarh government in the Mahanadi upper basin would reduce the flow of water to Hirakud reservoir.

"The tribunal shall determine water sharing among basin states on the basis of the overall availability of water in the complete Mahanadi basin, contribution of each state, the present utilisation of water resources in each state and the potential for future development," Press Information Bureau (PIB) statement said.

The statement said the tribunal would submit its report within a period of three years, which can be further extended but not more than two years.

Earlier, the Odisha government had accused the Modi government of supporting Chhattisgarh and delaying setting up of the tribunal.

The apex court had also rapped the Centre on the issue on January 23.

A bench of Justices S.A. Bobde and L. Nageswara Rao had rejected the plea of additional solicitor general A.N.S. Nadkarni to grant two weeks time to the Centre for a fresh effort to resolve the issue within the "negotiation committee" instead of setting up a tribunal. Advocate C.S. Vaidyanathan appearing for Chattisgarh had also supported the Centre's stand.

During the previous hearing, the court also had pulled up the Centre for frequently shifting its stance on the issue.

The Centre had earlier filed a statement in the court assuring to set up a tribunal.