Earlier, parliament was adjourned as angry opposition deputies insisted that the government must stand down.
A key coalition partner, the Trinamool Congress, stayed away from a crucial meeting of the alliance, demanding the resignation of the defence minister, George Fernandes.
The BJP chairman, Bangaru Laxman, resigned and four defence officials were suspended on Tuesday after an internet company released video tapes showing them accepting more than $2,000 from journalists posing as arms dealers.
Earlier, parliament was adjourned as angry opposition deputies insisted that the government must stand down.
Meanwhile, resisting calls for the resignation of the government , the BJP has described the events as a political conspiracy against them.
The party spokesman, Vijay Kumar Malhotra, said that "honesty is the biggest asset of the government and a conspiracy has been hatched to destroy it."
Cracks appearing
Though the BJP claims that its supporters are solidly behind it, cracks have begun to appear, with some allies such as the Telugu Desam Party demanding an independent inquiry into the incident.
Opposition parties cutting across party lines brought Parliament to a standstill on Wednesday, insisting that the government must stand down.
Officials were forced to adjourn sessions of the upper and lower houses until 2pm (0830 GMT) after the MPs chanted calls for Prime Minister Atal Behari Vajpayee to quit.
After an emergency cabinet meeting, the government said it was ready to investigate the allegations made by Tehelka.com.
Damning footage
The website said two of its journalists had posed as businessmen for a fake company, West End International, trying to sell fictitious hand-held thermal imaging devices to the Indian military.
They used hidden cameras to videotape politicians, bureaucrats and army officers accepting money.
In one of the most dramatic clips, Mr Laxman is shown taking a wad of currency notes and placing it next to him.
The incident comes amid court hearings into the Bofors arms scandal in the 1980s, in which a number of Indian politicians as well as businessmen are accused of taking bribes.