The United Progressive Alliance (UPA) coordination committee will meet on July 31 to discuss the formation of Telangana state.
According to reports, the Congress leadership is in favour of creation of separate state and deliberations are on over inclusion of two Rayalaseema districts in Telangana.
A Central Working Committee (CWC) meeting is also expected to be held after the Coordination Committee meeting.
Congress MPs from Telangana have so far accused the Centre of following what they call a 'one-step-forward-two-backward' approach when it comes to addressing their demand for a separate state.
The Centre's flip-flop over the issue began in December 2009 when the then Home Minister P. Chidambaram promised the formation of a new state only to go back on it after a few days.
The issue was later pushed before a committee headed by Justice B.N. Srikrishna. This panel did not come up with a tangible solution, but instead presented six options.
These included the creation of a Telangana Regional Council within Andhra, bifurcation of the state into Telangana with Hyderabad as the capital and Seemandhra with a new capital; bifurcation of the state into Seemandhra and Telangana after making Hyderabad a Union Territory; bifurcation of the state into Seemandhra and Telangana with enlarged Hyderabad metropolis as a Union Territory; bifurcation of the state into Rayala Telangana and Coastal Andhra; and maintenance of status quo.