India and Russia would put their official seal of approval for the refit of Admiral Gorskhov besides new fighters and helicopters for the aircraft carrier during the visit of Russian Defence Minister Sergei Ivanov beginning Tuesday.

Ivanov will meet his Indian counterpart George Fernandes on Tuesday and impart the final approval for the deal.

Senior officials from both sides will also sign an inter-governmental agreement, under preparation for several months now, during the meeting.

Sources in the Indian Navy said the deal is worth $1.68 billion, which includes the entire refit of Admiral Gorskhov and 28 MIG-29K fighter and six Kamov helicopters to be stationed on the 44,000-ton aircraft carrier.

The ship's engine room was partially gutted in a fire in the mid-90s. It was decommissioned over a decade back as part of a massive scaling back of the military capabilities of Russia after communism collapsed.

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The Cabinet Committee on Security on Saturday gave Fernandes the go-ahead for signing the agreement during Ivanov's visit. Officials said the agreement ensures that 'future supplies, spare-parts and other technical support do not suffer as it has happened in the past'.

The nitty-gritty of the contract was worked out over several months of negotiations by a team of officials from Naval Headquarters who 'went over our mistakes from past Russian contracts', said a naval officer.

India and Russia took a long time to finalise the contract owing to disagreements over price.

Russians were demanding $800 million for the refit of the Kiev Class carrier while India was ready to fork out $600 million. According to sources, the final amount the two sides settled on is around $675 million.

Similar differences cropped up over the cost of the MIG-29K with India at one stage even threatening to negotiate with French firms for their aircraft. However, ultimately the two sides agreed to a deal that was intricately linked to several other major defence deals between them.

A couple of years back, India wanted to lease two nuclear submarines and long range TU-22 bombers. The Russians refused to negotiate any major deal without clearing the one on Gorshkov.

Early in the negotiations, the Russians offered to 'gift' away the carrier and asked the Indians to pay only for the overhaul of the carrier. India took the bait without realizing that Russians were quoting an exorbitant price for the overhaul.

As the negotiations went on, the Indian Navy was reduced to a single aircraft carrier INS Viraat. In the wake of 9/11, the Indian Ocean overnight became a critically important ocean and in all possibility the theatre for future strategic games of global powers.

INS Viraat has hardly a decade of service left while India's indigenously-built aircraft carrier, the Air Defence Ship, would not be ready before 2010. Staring at the spectre of a shrinking strategic naval reach, the government was forced to complete the deal at the earliest.

But, according to a senior naval officer, even the refurbished Gorshkov would not be ready for another four years.