Bolivia has said it does not plan to compensate British power company Rurelec plc for a subsidiary the government nationalised earlier this year.
Legal Defence Minister Elizabeth Arismendi said a financial study revealed significant debt at Empresa Electrica Guaracachi SA, so Bolivia does not owe Rurelec "anything".
Ms Arismendi said the government was prepared to prove its case in arbitration if necessary.
President Evo Morales announced on May 1 that he was nationalising four power companies including Guaracachi, the nation's largest generator.
Last week Rurelec gave a deadline of this Saturday for Bolivia to respond to its demand for 79.3 million US dollars (£49.6 million) in compensation.
Ms Arismendi called that amount "unreal".