Nanded (Maharashtra), July 17 (IANS) A shutdown was observed Saturday in Dharmabad town in Maharashtra's Nanded district to protest the agitation led by Telugu Desam Party chief N. Chandrababu Naidu against construction of the Babli Dam, which Andhra Pradesh fears will affect its water supply, an official said.

Naidu and his supporters, who were arrested Friday, are likely to be released and escorted to the Maharashtra-Karnataka border Saturday.

Naidu and his 75 supporters, including over three dozen legislators and parliamentarians were arrested after they violated prohibitory orders and entered the state to protest against the Babli Dam work on Godavari river in the district. They said that Maharashtra was grabbing more than its share of water.

They spent the night in the government technical college.

The official described the situation in Dharmabad as "peaceful and under control", with no report of any untoward incident.

The small Babli Dam has been a bone of contention between the two states since five years when its construction began near Babli village on river Godavari.

With a capacity of 2.75 thousand million cubic feet, there was an agitation in 2007 by some Andhra Pradesh politicians against the dam.

Andhra Pradesh believes that the construction of Babli Dam would cut off water supply to the Pochampad Dam in Telangana region of the state, adding to the woes of the farmers and creating serious water problems.