Bal Thackeray, leader of the extreme right-wing Hindu organisation Shiv Sena, is set to be prosecuted over his alleged role in anti-Muslim riots in 1992 in which hundreds of people died.
Mr Thackeray said the decision by authorities in the western Indian state of Maharashtra to authorise a police prosecution was an explosion which would set the whole country on fire.
This is an incitement to communal riots
A judicial commission into the riots that followed the illegal demolition of the 15th century Babri mosque at Ayodhya eight years ago accused Mr Thackeray and other Shiv Sena leaders of making provocative statements which sparked off the riots.
His supporters have already taken to the streets to protest against the prosecution decision and have forced the closure of markets in central Bombay.
The city's suburban rail network has stopped working in the central and western suburbs as railway authorities fear violent protests.
The decision to prosecute was announced by Chhagan Bhujbal, deputy chief minister of Maharashtra state.
Hindu militants demolished Ayodhya mosque in 1992
In a belligerent statement, Mr Thackeray said: "If you are governing in a vengeful manner then you must be prepared to face consequences as well."
Mr Bhujbal had "ignited a landmine and this is an incitement to communal riots", he said.
"If something untoward happens tomorrow then the responsibility will lie solely with the government and Bhujbal," Mr Thackeray added.
Although he held no official post Mr Thackeray wa the uncrowned monarch of a BJP-Sena administration in Maharashtra which was routed in assembly elections by the Congress party last October.
It is not the first time that the self-confessed admirer of Adolf Hitler finds himself in the eye of a storm.
Shiv Sena supporters vandalised posters for a film they disapproved of
Referred to as a tiger by his supporters, the cartoonist turned politician has courted controversy ever since he founded the Shiv Sena more than 30 years ago.
Mr Thackeray has repeatedly attacked Muslims in his speeches and his followers once dug up a cricket pitch to prevent Pakistan from playing against India.
He also prevented the screening of a Hindi film in Bombay which portrayed a lesbian relationship, on the grounds that it was not only immoral but against Indian traditions.