"I will form a new political party in the state. Some of the (BJP) legislators will join the new outfit. The outlines of the new party will take concrete shape after Janardhana Reddy comes out of jail," Sriramulu said addressing a rally at Cowl Bazar area on the last day of electioneering for the November 30 by-poll to Bellary Rural seat.
Sriramulu, who quit the saffron party and is seeking re-election as an independent in the by-election, brushed aside state unit BJP President KS Eswarappa's remarks that the door of the party remained closed for the rebel leader.
"Let Eswarappa guard his party legislators from going to other parties. Let him secure the doors of his own party," Sriramulu said.
He claimed he had backing of several legislators in North Karnataka region and also the support of the people.
Janardhana Reddy was arrested by CBI in connection with its probe into illegal mining has been lodged in a Hyderabad jail since August 5.
Sreeramulu also apologised to opposition Congress leader Siddaramaiah for his supporters disrupting an election rally in Bellary on November 26.
The BJP on November 25 suspended two MPs -- J Shanta, Sanna Fakirappa -- and four legislators, including three MLAs, who defied the party directive and supported Sreeramulu in the by-poll.
Sriramulu, a trusted lieutenant of mining barons G Janardhana Reddy and G Karunakara Reddy, quit assembly membership after he was denied a ministerial berth following his indictment along with the Reddy brothers in the Lok Ayukta report on illegal mining.