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Pardon me for asking the same question again but I have to do so in view of the following recent guideline to calculating the 5 year period in UK.

"Caseworkers may count the period between entry clearance being granted and the date the applicant entered the UK towards the five years, provided this period was not longer than three months"

I am a Work Permit holder working for the same employer with total absenses (paid) around 60 days. My visa is valid from 01-02-2007 to 01-02-2012. However I entered UK 26 days later on 26-02-2007.

Can I apply for settlement from 5-01-2012, that is 28 days before 01-02-2012 (end of my visa validity / 5years)

If not on which dates I need to book PEO appointment.?

You have been granted leave sufficient to apply for settlement as normal (read the sentence preceding the text you have quoted). You should apply between 30-Jan and 01-Feb (both inclusive).

Many Thanks SushdMehta. Since I only can apply on these 3 days I have to check everyday to get an appointment.

Hi sushdmehta. Today I called Home office to enquire about booking an appointment and when I asked about the day I could apply for ILR considering I entered UK on 26/02/2007, I was told to apply 28 days before the end of my current visa (01-02-2012). I again made it clear to her that I entered 26 days late and got the same reply.
I am confused now. Please help me as this is very important to me as my daughter has to come back from her University and would like a more flexible window of dates.

Your 5 years started from the date of your entry, not your start date of visa. 28 days before 25-02-2012 only leaves you couple of days to apply ILR before your current leave expires. Tight.