Beware, this is a hack, no warranties.
As it was working at oC 10.6, I would try to replace the files_external app by the one extracted from oC 10.6 tarball. Doing so, you’ll maybe have to deal with integrity issues afterwards.
Reason: Both oC 10.6 and 10.7 come with the same files_external 0.7.1. But the used library phpseclib obviously differs, or at least the file Net/SSH2.php is different.
Good luck for you, @Gowtham.s.
EDIT: Well, maybe I shouldn’t give such advices to other users, but this is what I would do being in this situation.