In a rare gesture of warmth and a departure from protocol, Prime Minister Manmohan Singh went to receive Koirala at the Indira Gandhi International Airport.

"His decision to go to personally receive him shows the warmth in the India-Nepal relations and the importance India attaches to its ties with Nepal," an Indian official told IANS.

In the past few months that saw a flurry of visits by foreign dignitaries, Manmohan Singh personally went to receive only two of them: US President George W. Bush and Saudi monarch King Abdullah.

The visit - his first foreign trip after becoming prime minister over a month ago - will give Koirala an opportunity to discuss afresh bilateral issues, including important hydroelectric projects and border demarcation, official sources told IANS.

Koirala will brief Manmohan Singh Wednesday on steps taken by his government to strengthen democracy and the economy after weeks of protests forced King Gyanendra to cede power to a seven-party alliance.

The octogenarian patriarch of Nepali politics, who comes here accompanied by five senior ministers, including Finance Minister Ram Sharan Mahat, will meet President A.P. Abdul Kalam, Home Minister Shivraj Patil and former prime minister Chandra Shekhar, who is ailing.

He will meet Defence Minister Pranab Mukherjee and Bharatiya Janata Party leader L.K. Advani Friday before flying off to Kathmandu in the evening.

New Delhi will announce a massive economic aid package estimated to be over $20 million to revive the Nepalese economy battered by nearly a month of unrest and shutdown in May.

The details of the package are likely to be finalised during a meeting between Finance Minister P. Chidambaram and his Nepali counterpart Mahat here Thursday.

The economic package is likely to focus on capacity building and infrastructure, especially road building, for long-term development of the Himalayan state.

Manmohan Singh and Koirala will also discuss steps to place bilateral relations on a new footing and are likely to reappraise a 1950 treaty to bring it more in tune with contemporary realities.

Although all bilateral and global issues, including the role of the UN and international community in the stabilisation of Nepal, will be discussed, economic diplomacy will top the agenda of Koirala's visit.

"The talks would be on financial assistance, Indo-Nepal benefits and Nepal's economic development," Nepali Home Minister Krishna Prasad Sitaula told the media after a cabinet meeting at Koirala's residence in Kathmandu.

His plan to go to Bangkok for treatment has been put on hold, sources told IANS. He will now go back to Kathmandu Friday.

Koirala is also expected to discuss with Manmohan Singh the ongoing negotiations between the Nepalese government and Maoist rebels on the shape of the future political structure and the election to its constituent assembly.

New Delhi has cautiously backed the integration of Maoists into the political mainstream provided they renounce violence and come to a negotiated settlement with the seven-party alliance.