In a letter to Tamil Nadu Chief Minister Pinarayi Vijayan, Achuthanandan, Chairman of the State Administrative Reforms Commission, sought the probe, saying it was necessary as the government's image should not be affected by the charges.
The CPI(M) leader said though the government had explained the matter, the UDF and the media were repeatedly raking up the issue.
Achuthanandan said the UDF should not be allowed to take political mileage out of the allegations.
Attacking the government on the issue, KPCC President M M Hassan said the LDF has become a government of "encroachers".
The charges against Chandy, a businessman-turned- politician representing Kuttanad in the assembly, is that he had encroached upon backwaters near his tourist resort at Kuttanad in Alappuzha district.
It was also alleged that he misused his position and constructed a road to his resort using government funds.
Chandy, an NCP nominee in the LDF cabinet, had rejected the charge and stated that he would quit public life if the allegations were proved true.
The UDF opposition members had staged a walkout in the assembly on August 17, demanding the resignation of Chandy and a probe into the charges against him and Anwar.
The charge against Anwar, MLA from Nilamboor, is that the legislator was running a theme park in an environmentally- sensitive area atKakkadam Poyil in Kozhikode district, violating rules.
He had allegedly constructed a check dam blocking the natural flow of water in a stream, to facilitate its flow to the theme park.
Anwar, a former Congress worker, has also denied the charges and termed it as an "effort to tarnish" his "political image".
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