The Indian government has rejected a proposal by Union Carbide Corp. to compensate the victims of the Bhopal poison gas leak because "the company is trying to get away by giving very small compensation," India's Prime Minister Rajiv Gandhi was quoted as saying yesterday.

In sharply worded criticism of the Danbury, Conn.-based company, Gandhi said in a published interview that there is "no way" his government could accept Carbide's offers to date and that it now "seems very unlikely" that India and Carbide will reach a settlement and avoid the need for a lawsuit in U.S. courts.

A Minneapolis law firm hired by the Indian government is expected to file suit against Carbide in federal court in New York early next week. The government's entry into the U.S. courts is expected to set off a legal donnybrook over who should represent the victims of the Bhopal accident, in which a poison gas leak from a Carbide plant killed more than 2,000 people and injured 200,000 more.

"They are trying to disown responsibility," Gandhi said about Carbide in an interview with the Financial Times of London. "They are trying to get away by giving very small compensation and hiding behind legalities. It is one of the biggest disasters in the world."

"There is no way we can accept the compensation they have suggested, which is too low," he added.

Gandhi did not say in the interview what the Carbide offer was, and a Carbide spokesman yesterday declined to comment on the prime minister's remarks. The spokesman said the company is continuing to negotiate with the Indian government.

Union Carbide Chairman Warren Anderson and other company officials have said repeatedly in recent weeks that they hoped to reach a quick settlement with the government, saying this would avoid protracted litigation that would delay any compensation for the victims for years to come.

But this prospect appeared to fade two weeks ago after Carbide released its own report on the gas disaster, placing responsibility for the accident almost exclusively on the Indian managers of the plant rather than on corporate officials in the United States. The Indian government immediately blasted the company's "so-called report," calling it "unjustified and unacceptable."

In yesterday's interview, Gandhi said that Carbide's behavior has made his government much more wary of U.S. multinational companies in general and forced his government to "rethink" its policies on attracting foreign investment, particularly from American companies.

"When they are in it only for making a buck at any cost, that's not good enough for us," Gandhi said.

Gandhi's comments came as a group of U.S. lawyers were preparing to file their own lawsuits in India, using Indian lawyers, to block the Indian government from taking over representation of Bhopal victims. The suits will challenge the constitutionality of an Indian law giving the government exclusive right to represent the victims.

They also will charge that the Indian government has a "conflict of interest" in representing Bhopal victims because it "turned a blind eye" to safety problems at the plant and failed to enforce regulatory laws that could have prevented the disaster, according to Richard Brown of San Francisco, one of more than 100 personal injury lawyers who have filed U.S. suits against Carbide and oppose the Indian government's entry into the case.

In addition, the suits will allege a conflict on the grounds that the government, through publicly owned financial institutions, owns a substantial interest in Union Carbide India Ltd., the Carbide subsidiary that owned the Bhopal plant, Brown said. Union Carbide Corp. owns 51 percent of the Indian unit.

"There are all kinds of improprieties in terms of the Indian government," Brown said. "They may very well have an independent liability in this."

The Indian lawsuits are the product of a group of U.S. lawyers, many of whom were widely criticized for flying over to India after the disaster and signing up thousands of victims as clients.

"We feel we have to do something because it is obvious the Indian government is trying to capture the litigation," said Brown.

Roger Brosnahan, a lawyer representing India, declined to comment on the U.S. lawyers' action, saying the issues raised will be addressed when the government files its suit next week.