MOSCOW (AP) _ Saying the time had come for action, Prime Minister Yevgeny Primakov ordered the government and its agencies on Thursday to settle their huge outstanding debts within two months.

The government also reached agreement with the natural gas monopoly Gazprom, Russia's largest company, to pay its overdue taxes. Gazprom has dragged its feet on the payments, citing the government's failure to pay for gas supplies.

It's unclear where the government and state-owned companies will find the money to fulfill Primakov's order. Primakov says the bills must be settled without printing new money, a move that would lead to higher inflation. Instead, many of the debts will likely be settled through barter or other non-cash transactions.

The government debtors have paralyzed the Russian economy by failing to pay wages, pensions and invoices for goods and services to state-run companies. Workers and companies cannot pay their bills, leading to a chain of non-payments that is disabling Russian industries.

According to a plan worked out by the Ministries of Economy and Finance, the government and state-owned companies will have to clear mutual debts of $3 billion by mid-December.

The Cabinet discussed the measures last week and was scheduled to finalize them Thursday. But Primakov abruptly canceled the Cabinet meeting, saying the proposals were already clear and needed to be implemented.

``We have had enough discussions, now we must act,'' spokesman Igor Shchegolev quoted Primakov as saying.

Officials admit that the government's unpaid bills are small compared to those in the private sector. They estimate all debts in Russia total a staggering $75 billion, or about 40 percent of the country's gross domestic product.

Gazprom has agreed to pay the government $820 million in taxes in three installments this year, said the deputy chairman of the board, Pyotr Rodionov, according to the Interfax news agency. About $510 million of that will be paid in cash, the ITAR-Tass news agency said.

The agreement also bound the government to begin settling its debts to Gazprom for unpaid gas bills, estimated to total $875 million.

Meanwhile, the Russian ruble fell abruptly against the dollar Thursday after a surge the day before. The Central Bank ended several days of intervening to resuscitate the ruble, and the currency closed at 16.2 to the dollar, compared with 13 to the dollar Wednesday.

An audit of the Central Bank released Thursday showed that the bank spent $6.4 billion in hard currency reserves to defend the ruble in 1997.

In other economic news Thursday:

_The International Monetary Fund said its mission would arrive in Russia on Tuesday and stay at least a week, Interfax reported.

_Inflation for the first 12 days of October was a moderate 0.8 percent, after soaring last month following the ruble's devaluation, the government said.

_Russia will continue talks with the United States on receiving grain and other foods on long-term credit and as humanitarian aid. With food imports falling sharply and the grain harvest likely to be the worst in 40 years, the government is building up emergency food reserves.

_Russian stocks rose on healthy volume, up 14.16 percent.