Naveen Patnaik had said the state government will leave protect the interests of the state.
The Odisha cabinet headed by Chief Minister Naveen Patnaik on Sunday empowered the state government to explore all possible options to protect the interests of the state on Mahanadi project dispute with Chhattisgarh, an official said.
"The state cabinet unequivocally endorsed the stand taken by the state government and resolved to explore all possible options for protecting the interests of the people of Odisha," said Chief Secretary A.P. Padhi.
He said the state government would soon take a decision in this regard including moving the Supreme Court.
Referring to the tripartite meeting on the Mahanadi project issue on Saturday, he said the Chhattisgarh government did not agree to the demand of the state government that includes halting of construction work upstream on the Mahanadi.
"We had proposed to constitute a fact finding team with representatives from both the states and other experts to inspect and review the possible impact of the projects. The team would have taken three months time to prepare the report," said Mr Padhi, adding the Chhattisgarh government did not agree to stop construction work during the intervening period.
The tripartite meeting attended by Mr Patnaik, his Chhattisgarh counterpart Raman Singh and Union Water Resources Minister Uma Bharti failed to resolve the water sharing dispute.
"Chhattisgarh government proposed for a joint control board to resolve the water issue. But we did not accept the proposal the board has no statutory power. It is just a recommending body," said the chief secretary.
After returning from New Delhi, Mr Patnaik had said the state government would leave no stone unturned to protect the interests of the state.