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A Mobile Ad Hoc Network (MANET) is a self-organizing, infrastructureless, multi-hop network. The wireless and distributed nature of MANETs poses a great challenge to system security designers. Key management is crucial part of security, this issue is even bigger in MANETs. The distribution of encryption keys in an authenticated manner is a difficult task. Because of dynamic nature of MANETs, when a node leaves or joins it need to generate new session key to maintain forward and backward secrecy. In this paper we divide the network into clusters. Cluster head will maintain the group key, it will also update the group key whenever there is a change in the membership And also we provide authentication between communicating nodes both in inter and intra cluster. This paper proposes a new cluster based tree (CBT) algorithm for secure multicast key distribution, in which source node uses Destination Sequenced Distance Vector(DSDV) routing protocol to collects its 1 hop neighbors to form cluster. The simulations are performed using Network simulator, Simulation results shows the demonstration of CBT using DSDV in terms of end to end delay, key delivery ratio and packet drop rate, fault tolerance, communication cost under varying network conditions.