Dubai economy - can Dubai pay its bills?

The news that Dubai World has requested a delay in making its massive interest and loan repayment bills is a great shock especially as things seemed to be getting better.
Its essentially government debt so the Dubai Government just has to stand behind these debts and guarantee repayment.
The Ruler was in the UK last week - presumably to notify the powers that be of this pending problem - and the steps in place to resolve it.
Not a good PR outcome for Dubai - public confidence needs to be restored asap
The only thing reinforcing my belief that we will get through all this without a complete collapse - is that the fundamentals of the various sectors of the Dubai economy seem strong - see
2daydubai.com/pages/dubai-economy.php