Dhinakaran, who is waging a running battle with Palaniswami and Panneerselvam camp for supremacy in the party, said the chief minister should meet Governor Ch Vidyasagar Rao and tender his resignation and then convene a meeting of party legislators.
"Let Palaniswami say that the post of Chief Minister and the Cabinet which was given by 'Chinnamma' (V K Sasikala) is not necessary ... Let them choose anyone (as Legislature party leader)... We are not concerned," he told reporters here.
Dhinakaran who had said two days ago that the government would fall within a week, said he was ready to send his loyalist MLAs to the meeting of legislators he was proposing, and added that "I am not responsible if they do not vote for you (Palaniswami.)"
After the Palaniswami and Panneerselvam camps merged last month, Dhinakaran loyalist MLAs had petitioned the governor seeking Palaniswami's ouster.
Also, Opposition parties led by the DMK had urged Rao to order a floor test and ask Palaniswami to prove his majority.
The matter later went to the Madras High Court, which has restrained the Assembly Speaker from holding a floor test till September 20.
Dhinakaran alleged that MLAs were lured through inducements. He claimed that but for some legislators who were in the Palaniswami camp out of "selfishness", the majority was with him.
He said all his loyalists were determined (to see the ouster of Palaniswami regime), and he cannot "change" that.
He repeatedly asked why the chief minister and others in his Cabinet had given an affidavit endorsing Sasikala as party general secretary and him as deputy general secretary to the Election Commission.
Affidavits were filed by Palaniswami and other leaders when Pannneerselvam rebelled and petitioned the EC disputing the leadership of Sasikala.
Subsequently, Palaniswami and other leaders of his faction sidelined both Sasikala and Dhinakaran and after merger of the Palaniswami-Panneerselvam camps, the unified group also annulled the appointments of the jailed leader and her nephew.
To a question, Dhinakaran asserted that he had not indulged in any "corruption" and said the cases (of alleged FERA violation) against him pertained to 1996 when he was not even an MP.
He said he became an MP only in 1999.