Last month, the Army announced a special package for about 600 renegades it has enlisted, grading them for remuneration between Rs 2,000-Rs 5,000. ``The Army should have implemented its scheme quietly instead of going public,'' says state police chief Gurbachan Jagat. ``The friendlies listed with us now feel discriminated against and are demanding more money. And everyone is trying to inflate figures and lists.''

Says state Chief Secretary Ashok Jaitley: ``It has become a problem of finances...the state certainly does not have the money to pay these men. It is for the Centre to find a way out.''

State officials admit that renegades play a crucial role in providing intelligence on hideouts. They are also being used by the Army and thepolice as a second line of attack: some 204 have been killed in the last three years.

A fortnight ago, Chief Minister Farooq Abdullah handed over a list of 1,800 names of renegades to the Centre saying that all should be enrolled in the rehabilitaion scheme which the Centre had announced soon after elections in the state. Sources say that he was told that the list was too long.

Jaitely says that the list has not been prepared by the state government but by a former militant, Javed Shah, who has been ``representing'' the renegades. Shah, a J&K MLC, who heads an outfit called the Iquwan National Security Organisation, says that he wants remuneration at par with the Army's new scales. He says he has already filed a petition demanding this parity in the J&K High Court and that the renegades would step up their agitation if the demands were not met.

``These former militants were flush with funds from Pakistan when they got training in Pakistan or operated in the Valley. But now they don't have money forfood. If the situation continues, they will be prepared to take any step to survive,'' he warns.

There is even a dispute over how many friendly militants there are. While police chief Jagat says the number of renegades getting remuneration is around 1,200 (including the Army's 600), Javed Shah says this is a gross underestimation. He says that only about 300 friendlies are getting the paltry monthly remuneration of Rs 1,500 and at least 900 men were on his ``wait-list.'' Besides that, there was another list 200 men who were in the ``disputed'' category and 400 more, who had died and for whom ex-gratia payment was being demanded.

``If you put all these figures together, you will get a list of 1,800--excluding the army's list--and that is the list I have handed over to the Chief Minister. He has assured me of a resolution to the problem, failing which the plight of these unpaid friendlies could create a law-and-order problem in J&K,'' Javed says.