With Jethmalani refusing to give in and the entire bureaucracy, including the Prime Minister's Office, supporting their colleague (who is also president of the IAS Officers Association), the situation has acquired the potential of snowballing into a major crisis for the government.

Soon after the ugly confrontation broke out, there were moves to transfer Aggarwal from the Ministry to resolve the impasse. But with the government now asking Jethmalani to give her back her powers, it is clear that the issue is only going to get worse.

The bureaucracy has already got the better of Jethmalani on the two issues (MS Shoes case and the MRTS project) which led to his confrontation withAggarwal. On both these issues, the government chose to ignore the Urban Affairs Minister's objections and agreed with the stand taken by Aggarwal.

In an immediate response to the Cabinet Secretary's letter suggesting that Aggarwal be restored her powers in the Ministry, Jethmalani on Tuesday shot off a ``strongly-worded'' letter to Prime Minister A B Vajpayee, rejecting the suggestion and justifying his decision.

Sources said that Jethmalani, in his detailed letter, took strong exception to the fact that Cabinet Secretary Prabhat Kumar had taken the unprecedented step of writing to a cabinet minister directly and advising him on a matter pertaining to his ministry.

Kumar had reportedly asked Jethmalani to restore Aggarwal her powers on the grounds that as Secretary she was the senior-most officer in the ministry and could not be side-tracked. The Cabinet Secretary is also said to have informed the Minister that since Aggarwal's appointment was cleared by the Appointments Committee of the Cabinet, anyre-allocation of her responsibilities would require its prior approval.

In his letter to the Prime Minister, Jethmalani is learnt to have defended his decision to divest Aggarwal of her powers on legal as well as administrative grounds. He is said to apprised the Prime Minister that as Minister-incharge he was well within his powers to re-allocate work among his officers to ensure the smooth functioning of the Ministry.

The Minister is also understood to have explained that he was constrained to hand over Aggarwal's responsibilities to her immediate junior as none of his decisions were being implemented by her, causing the administration of the Ministry to come to a standstill.