While the state cabinet and the ruling Congress party leaders from coastal Andhra and Rayalseema region welcomed the brief statement, there was total confusion and disappointment among the leaders of the Telangana region.

Most of the Telangana leaders have seen the statement as an attempt to dilute the earlier statement of Chidambaram made on December 9 announcing the start of the process of the formation of Telangana state.

While the leaders of Andhra and Rayalseema region fighting for a united Andhra Pradesh and against Telangana state hailed Chidambaram's appeal for peace and harmony and the legislators from the region have indicated that they might withdraw their resignations, there were indications of fresh trouble in Telangana region.

The state cabinet, at its emergency meeting on Wednesday evening welcomed the statement of Chidambaram and decided to respect it and most of the Congress leaders have also appreciated it as an attempt to find a solution to the problem, but the other parties have alleged that this was a bid to create confusion among the people of Telangana.

Briefing the media after the cabinet meeting ministers Andhra Pradesh ministers Geeta Reddy, Raghuveera Reddy and D Nagendar said that the statement was very categorical about the intentions of the Central government to have a wider consultations with all the parties.

Nagendar said that the process of the formation of Telangana state was very much on, and there was nothing to suggest that the Centre had gone back on its commitment on Telangana state.

"The grouse of the political parties was that the Central government did not consult them before making the statement of December 9. Now the Central government has said that it will have larger consultations with all of them," he said.

Referring to Chidambaram's appeal to withdraw the agitation and restore peace in the state, Geeta Reddy said now there was no reason for continuing the protests. She said cabinet also appealed to all the legislators who had resigned on the issue to withdraw their resignation.

But the trouble for the state government was unlikely to come to an end.

Telangana Rashtra Samiti, and the leaders of the Telugu Desam and Congress party in Telangana have decided to hold a joint meeting on Thursday to discuss the situation arising out of the statement and form their own Joint Committee to step up their agitation for separate Telangana state.

The situation in Hyderabad and entire Telangana region, which remained charged throughout the day, had become highly tense as the people from all walks of life were trying to understand the meaning of Chidambaram's statement. Fearing fresh trouble and violence, the state government put the police on high alert in Hyderabad and other parts of the state.

TRS president K Chandrasekhara Rao warning the Centre against diluting its stand demanded that the constitutional process for the formation of Telangana state should be started immediately. "There is no constitutional requirement for political consensus or a resolution to the state assembly for the formation of a new state," he said.

"We know that Telangana can not be formed immediately and Parliament can not pass the bill tomorrow or day after. It will take time but the central government should start the constitutional process immediately. That is the best solution to the problem," he said.

He appealed to the Telangana leaders of all political parties to learn a lesson from their counterparts in Andhra region who kept aside their party flags, rose above the party lines and became united to fight for their cause.

He said that after the Central government had given a clear commitment on the formation of Telangana state, it cannot go back. "The state is already completely divided on regional lines and the government officials, lawyers and employees were not in a position to work together," he said.

Meanwhile, senior Congress legislator and former minister Damodar Reddy said that a meeting of Telangana leaders of different parties will be held in Hyderabad on Thursday morning and form a Joint Action Committee.

N Janardhan Reddy, deputy floor leader of Telugu Desam in assembly has also said that a meeting of all Telangana MPs and MLAs will meet in Hyderabad to chalk out their future course of action.

V Prakash of Telangana Vimochana Samiti said that Chidambaram's statement was a let down as the Central government has gone back on its word. "This talk of consultations is all bogus and aimed at further delaying the formation of Telangana state," he said warning that it will create new problems.