Under unbalanced conditions the three phase instantaneous power oscillates at twice the power system frequency. The magnitude of these oscillations can be used as a measure of the system unbalance. This article has introduced a new digital relaying algorithm designed to detect asymmetrical faults by monitoring the sinusoidal oscillations of the three phase instantaneous power measured at the generator terminal. Once an asymmetrical fault is detected, the algorithm checks the direction of the negative sequence-reactive power flow at the machine terminal to discriminate between internal and external faults. Power system test studies presented show that the new relay provides fast tripping for internal asymmetrical faults and back-up protection for external asymmetrical fault conditions.