Shivpal Yadav said the new outfit will be known as the Samajwadi Party Secular Morcha.
The former SP Uttar Pradesh unit chief had warned that a 'secular front' would be formed if Akhilesh Yadav did not hand over the reins of the SP back to Mulayam Singh.
"For social justice, the Samajwadi Secular Morcha will be formed and netaji (Mulayam) will be its national president," PTI reported Shivpal as saying.
Reacting to Shivpal's statement SP chief Akhilesh Yadav said, "I came to know about it through the media. If such a front is formed, it is good for the country.
Shivpal reportedly announced that Mulayam will head the secular front after a meeting with the SP founder in Etawah.
Mulayam had ignited the family feud when he replaced his son with his brother as the party's state unit chief in September last year.
A furious Akhilesh had later removed Shivpal from his cabinet
At a disputed national convention in January, Akhilesh, then Chief Minister, had removed his father from the party’s president’s post. He then won the party symbol for his faction from the Election Commission, beating back a challenge from Mulayam.
Sadhana Gupta, Mulayam's second wife, had said on March 7 that Akhilesh had promised to return the post to her husband within three months.
The family feud increased during the February-March Assembly elections, in which the Bharatiya Janata Party wiped out the Samajwadi Party. Even during the campaign, Mulayam had addressed just two rallies, one for Shivpal and the other for Sadhana's daughter-in-law Aparna Yadav.