The maximum demand on the power system increases day by day. We need to plan new generating stations, new transmission lines etc., to meet out this demand. Prior to this, we must effectively utilize the existing system by proper operation and control of the system. To improve the effectiveness of the existing system, we must operate the system upto its Maximum Loading Point without losing its stability. In this paper, it is proposed to operate the system upto its Maximum Loading Point without any voltage stability problem. Here, the Maximum Loading Point is estimated not only in normal steady state condition and also in different line outage conditions. The proposed work is analyzed using IEEE 14 bus test system. The proposed method is efficient to find out the critical line outage and can operate the system upto its Maximum Loading Point without any stability problem. © Euro Journals Publishing, Inc. 2012. © 2012 Elsevier B.V., All rights reserved.