Here are the 10 latest developments in this big story:
Mr Panneerselvam, who resigned on Sunday and has been asked to continue as chief minister, has "rejected" Ms Sasikala as the party's general secretary and said her sacking him as AIADMK treasurer is illegal. He has written to banks not to allow anyone access to party funds without his permission.
Mr Panneerselvam or OPS as he is called was branded "traitor" by Ms Sasikala at a meeting on Wednesday that she used to demonstrate her grip on the party. 131 legislators attended the meeting and were escorted out straight from there to their secret destinations. One requested a bathroom break and escaped to Mr Panneerselvam's side.
"I hope all of you who loved Amma will be with me," Ms Sasikala told lawmakers in an hour-long speech yesterday, invoking J Jayalalithaa, who was the sole leader of the AIADMK and Tamil Nadu chief minister when she died on December 5 in a Chennai hospital.
AIADMK parliamentarians are in Delhi today, where they intend to meet President Pranab Mukherjee to complain about Governor Rao not returning to Chennai. They allege it is a move designed to delay Ms Sasikala's oath to benefit her opponents.
Governor Rao has not returned to Chennai all this week despite the political confusion, provoking much criticism. On Wednesday, he was filmed at an event he attended in Mumbai stating "On TV in Chennai, when you put it on, you can hear them asking 'where is the Governor?' I am happy to be here in your midst."
On Tuesday night, Mr Panneerselvam visited Ms Jayalalithaa's memorial at Chennai's Marina Beach and said he had been forced to resign as Chief Minister. He now wants a chance to prove that he has majority support in a trust vote in the state assembly.
Mr Panneerselvam had resigned on Sunday to facilitate the election by party legislators of Ms Sasikala as their leader so she can be the chief minister. Ms Sasikala has never contested an election and has no administrative or political experience.
Her critics both within the party and outside have said that it is a huge drawback for a chief minister. For her supporters Ms Sasikala having spent 33 years as the closest companion of Amma or Ms Jayalalithaa is the only qualification she needs. They call her Chinnamma (mother's younger sister) and chose her to lead the party within days of Ms Jayalalithaa's death.
The Panneerselvam camp is hitching its hopes on a Supreme Court verdict next week in a corruption case against Ms Sasikala. If convicted she cannot be chief minister. Rival parties like the DMK have said that Ms Sasikala should not be made Chief Minister till the verdict is known.
Ms Sasikala, who had Mr Panneerselvam sworn in as chief minister only hours after Ms Jayalalithaa had died, to prevent him from being recruited by other parties or engaging in a contest for leadership, has accused him of conspiring with arch rival DMK to split the party. Mr Panneerselvam has said he is acting alone and has also denied reports that he has the powerful backing of the BJP-ruled centre.
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