Setting the stage for a triangular contest in Uttar Pradesh, the Congress on Tuesday said it will contest the assembly election along with the Akhilesh Yadav-led Samajwadi Party.
Akhilesh Yadav said in Lucknow there would be an alliance with the Congress for the staggered election starting on February 11.
"The Congress-Samajwadi alliance will form the next government in Uttar Pradesh," Congress leader Ghulam Nabi Azad said in New Delhi, a day after the Election Commission allotted the 'cycle' symbol to Uttar Pradesh Chief Minister Akhilesh Yadav.
Azad said the nitty-gritties of the alliance, particularly seat sharing, was being worked out.
Asked if the alliance would include Ajit Singh's Rashtriya Lok Dal (RLD), Azad declined to comment. "On that (Grand Alliance), I cannot say anything right now.
"There has been speculation whether or not this alliance is happening. This is to confirm that it is happening," he said.
According to NDTV, Akhilesh Yadav confirmed that his Samajwadi Party was closing a deal with the Congress and a number of smaller regional parties like the RLD.
It said Akhilesh Yadav had tried convincing his father Mulayam Singh Yadav to agree to an alliance with the Congress for a sweeping win.
Meanwhile, the Congress Chief Ministerial candidate for Uttar Pradesh, Sheila Dikshit, said she would step down if asked to. "There can't be two Chief Ministerial faces, so I will step down."
Alliance talks between the Congress and the Akhilesh faction have been on for some days for the seven-phase Uttar Pradesh election.
Akhilesh Yadav met Mulayam Singh Yadav twice since Monday evening, apparently to pacify him and ensure that he does not pit himself against the official party candidates.
Mulayam Singh on Monday lost the battle for the 'cycle' symbol to his son after the Election Commission recognised the Chief Minister as the leader of the Samajwadi Party.
Since then, Mulayam Singh is said to be pondering his next move.
Informed sources said the veteran 77-year-old patriarch had not yet made up his mind on whether to sit quiet or take the battle ahead by contesting against the Akhilesh camp.
The sources said Mulayam Singh heard out his son on both occasions since Monday but remained belligerent over the developments, igniting speculation that he could eventually throw his hat in the electoral ring.
The former UP Chief Minister has reportedly handed over a list of some four dozen party leaders loyal to him whom he wants to be given ticket for assembly seats of their choice.
This could become a bone of contention between the father and son.
Amid the new developments in state politics, the BJP took on the Samajwadi Party and the Congress.
"During UPA, they came together to ruin the country and now they are trying to experiment the same in Uttar Pradesh. I wish them all the best. The Uttar Pradesh government is characterised by corruption, torture of women, lawlessness and no development," Union Minister M. Venkaiah Naidu said in Delhi.
BJP National Secretary Siddharth Nath Singh said: "The Congress has called Akhilesh a failed Chief Minister. Now they will contest under the same failed Chief Minister."