Home Minister Rajnath Singh had yesterday claimed that the event on JNU campus in Delhi had received "support" from Hafiz Saeed.
The Jawaharlal Nehru University row is expected to add to the hold-up on government formation in Jammu and Kashmir, which is currently under President's Rule.
A programme in support of Afzal Guru - the Parliament attack convict whose execution in 2013 is one of the issues on which the two ideologically opposite parties do not see eye to eye - has triggered the mega controversy in JNU.
A student's arrest for sedition for allegedly participating in the Afzal Guru event, during which anti-India slogans were raised, has led to opposition parties accusing the government of overreaction on something that could have been handled within the institution.
BJP sources insist that the row will not affect its ties with the PDP. But sources say senior party leader Ram Madhav -- who was expected to visit Srinagar to iron out differences with PDP -- may not visit too soon, which has set off fresh speculation. Sources said he is in poll-bound Assam to finalise a possible alliance with the Asom Gana Parishad.
Afzal Guru was hanged after being convicted in the 2001 Parliament attack. The PDP had called his hanging a "travesty of justice".
"Whatever PDP had said about Afzal Guru was many years ago," a BJP leader told NDTV.
But last year, even after the formation of the alliance, the PDP reiterated its demand for return of Afzal Guru's remains.
This evening, condemning the events at JNU, senior PDP leader Muzaffar Baig said, "If anyone got arrested without evidence, then I shall condemn it just the way I would condemn people who raise anti-India slogans."
Ties between the BJP and PDP - uneasy since the beginning -- appear to have worsened since the death of Chief Minister Mufti Mohammad Sayeed on January 7. His daughter Mehbooba Mufti, who was expected to succeed him to the post, has demanded that the BJP give an assurance that it will implement the joint agenda of the alliance.
The BJP insists she is playing up to her electorate. Today, sources said even if the dates are not decided, Ram Madhav will meet Mehbooba Mufti. Meanwhile, the "leaders of both parties are in touch".