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The party's decision was communicated to Chief Minister Vilasrao Deshmukh by the party's state unit working president Abu Asim Azmi in a letter, copies of which were released to the media at a news conference by party spokesman Majid Memon in Bombay.
The letter, a copy of which is also sent to Prof N D Patil, the chairman of the DF's co-ordination committee, accused the Congress and Nationalist Congress Party (NCP) - the main partners of the DF - of making efforts to weaken the SP.
The decision came in the wake of Minister of State for Housing Nawab Malik joining the NCP on Wednesday.
Malik, the MLA from Kurla, had earlier been expelled from the SP for anti-party activities.
Malik is the second major SP leader, after MLA Bashir Patel, to have joined the NCP.
SP, which had two MLAs in the 288-member lower house, now does not have any representation in the state assembly.
"We had supported the secular DF government with a view to keep away fundamentalist forces like the Shiv Sena and the Bharatiya Janata Party," Azmi said.
"However, atrocities against minorities, including Muslims and Dalits are continuing unabated and the government is working on the policies laid down by the erstwhile Sena-BJP government," he claimed.
"We might not have any MLA in the assembly but our power among the masses must not be underestimated," Azmi warned in the letter.
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