The Ruias-led Essar Group has rejected the allegations made by WikiLeaks that it paid protection money to Maoists in Chhattisgarh, saying it is a law abiding corporate.

"Essar is a law abiding corporate. We don't think it is appropriate or necessary to react to baseless and unfounded allegations," an Essar spokesperson said in a statement.

A cable dated January 11, 2010, says, "A senior representative from Essar, a major industrial company with large mining and steel-related facilities in Chhattisgarh, told Congenoff (the Consul General's Office) that the company pays the Maoists 'a significant amount' not to harm or interfere with their operations."

The cable originated from the US consulate in Mumbai and was released by whistleblower website WikiLeaks.

"When the Maoists occasionally break this agreement and damage Essar property or threaten personnel, Essar sets different Maoist groups against each other to suppress the situation," the cable added.

It also said the Maoists pose a real threat to development and security in the region and efforts to bring these areas back into the orbit of the government is warranted.

As the government prepared to initiate action against the Naxals in Chhattisgarh, the US consulate, based on the trip of its officials to the region, said that the potential for human rights abuses by the security forces in the state is high.