LTE-Wi-Fi Radio Level Integration with IPsec Tunnel (LWIP) thrives as a complete solution to address the data requirement for telecom operators by effectively utilizing unlicensed spectrum. Co-located LWIP (C-LWIP) node couples Home eNodeB (HeNB) and Wi-Fi Access Point (AP) at radio protocol stack to enable a unified control decision over both LTE and Wi-Fi links. The challenges pertaining to small cells viz., high co-tier interference and QoS provisioning can be effectively addressed by using LWIP. This paper proposes a novel Power awaRE dynamiC traffIc StEering (PRECISE) algorithm which regulates transmit powers of LTE and Wi-Fi of LWIP node in order to minimize interference across LWIP nodes in dense deployments. The PRECISE algorithm also does flow steering across LTE and Wi-Fi interfaces by employing Multi Attribute Decision Making (MADM) technique. It thrives on ensuring Guaranteed Bit Rate (GBR) flow requirements by dynamically controlling the transmit power across multiple LWIP nodes. Interference mitigation sub-problem and ensuring GBR sub-problem are formulated as Mixed Integer Non-Linear Programming (MINLP) problems. The proposed PRECISE algorithm improves the network throughput by 84% compared to 3GPP Rel-12 LTE Wi-Fi interworking and 48% compared to state-of-the-art α-optimal scheduler. It also has reduced the number of unsatisfied GBR flows by 35% as compared to α-optimal scheduler. © 2017 IEEE.