The authorities in the Indian state of Jammu and Kashmir have threatened to dismiss more than 300,000 striking workers if they don't return to work by Thursday morning.

Government work has been severely disrupted in the state since the workers went on strike 20 days ago demanding the payment of employment benefits or allowances.

The state's Chief Minister, Farooq Abdullah told journalists in Jammu that several rounds of talks with the striking workers had failed to break the deadlock.

He said the government had no choice but to begin dismissing the striking workers to make way for fresh recruitment.

More than 300,000 striking workers are demanding immediate payment of their allowances, but the state government says its coffers are empty.

The chief minister said his government is facing an acute financial crisis and it is unable to pay the workers anything beyond their salaries.

More than ten years of separatist violence has put a great strain on the economy of Jammu and Kashmir.

The chief minister said recently that a quarter of a million young educated people in the state were jobless.

The tourism industry, the mainstay of the state's economy, was showing signs of recovery when the Kargil conflict last summer put an end to it.

The chief minister says the state urgently requires at least $200m to tide it over its present difficulties.