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Mehbooba Mufti was on Thursday elected leader of the PDP legislature party, finally clearing the decks for government formation in the state.
"I would like to thank all of you. Your support is my strength. The public has been very supportive over the last three months," she said after she was elected.
Mehbooba chaired the legislature party meet in the evening at her official residence in Gupkar.The party is likely to make an announcement on the future of the alliance with BJP shortly.
The BJP, meanwhile, said it will take a decision on government formatiom after a metting of its MLAs on Friday.
"Our party has not made any extra demand. The Agenda of Alliance on which the coalition government was formed is still the same," said Jitendra Singh, minister of state in the PMO.
National Conference leader Omar Abdullah asked Mehbooba why the government formation was delayed for so long if there were no new demands.
"If the last two months are a precursor and an indication of the next more than four years to come - God save our state for such indecisive, wavering leadership," he wrote on his Facebook page.
The PDP-BJP coalition, after 10 months rule from March 2015 to January, ran into rough weather following the death of then Chief Minister Mufti Mohammad Sayeed on January 7, after which the state came under Governor's rule.
Since then, the PDP leadership has sought confidence building measures and assurances on the implementation of the already agreed Agenda for Alliance from the Centre for forming the government again.
Hopes for government formation were revived after Mehbooba met Prime Minister Narendra Modi in Delhi on Tuesday.
She termed the meeting as "positive", saying she was "satisfied" with the discussions with the Prime Minister.
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