The governing coalition in India's most populous state, Uttar Pradesh (UP), says it is breaking up, opening up the possibility of early elections.
Ms Mayawati has denied reports that she will resign
UP Chief Minister, Ms Mayawati, says she wants fresh elections in the state to end political uncertainty.
There have been deep strains between Ms Mayawati's Bahujan Samaj Party (BSP) and the Bharatiya Janata Party (BJP), which is the junior coalition partner.
UP is politically India's most important state, sending the largest number of lawmakers to the national parliament.
Monday has been marked by confusions and denials in UP.
Media reports earlier in the day said Ms Mayawati was going to resign.
She has now denied that.
Prime Minister Vajpayee - differences with Mayawati have sharpened
She also told a rally of her BSP party that she had decided to end the state alliance with the BJP which leads the national coalition government.
Any decision about holding fresh elections would have to be formally ratified by the governor of UP, Vishnukant Shastri, who is appointed by the central government.
Mr Shastri told journalists that the BJP had already informed him that it was pulling out of the state coalition.
The BBC's Ram Dutt Tripathi in Lucknow says there is now an unprecedented constitutional crisis in Uttar Pradesh.
The BSP, whose power base is among lower caste Hindus, agreed to share power with the BJP after inconclusive state elections last year.
In those elections another party, the Samajwadi Party, got the most votes, but failed to gain an overall majority.
Differences between her coalition partners have sharpened recently over a controversial project to build an entertainment and shopping mall complex near the Taj Mahal.
Ms Mayawati had a row with federal BJP Tourism Minister Jagmohan, accusing him of being aware of the project which he later ordered to be scrapped.
Ms Mayawati was also angry at a BJP demand for the resignation of
a minister in her cabinet accused of involvement in the murder of a local poet.