The anonymous letter written in the name of "loyal Communist Party supporters" while appreciating Xi's sweeping anti-corruption drive had accused him of promoting "personality cult, not allowing 'rash opinions of central leadership', creating a 'one voice party' method" disregarding the collective leadership principle, the BBC reported.
Thousands of officials were punished in the anti-graft drive in the last three years after XI assumed charge.
The letter said "Dear Comrade Xi Jinping, we are loyal Communist Party members. We write this letter asking you to resign from all party and state leadership positions".
The letter was posted earlier this month on a state-backed website Wujie News creating an uproar in the media circles here as the state-run media operates under tightly controlled supervision of the ruling Communist Party of China,(CPC).
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Although quickly deleted by the authorities, a cached version can still be found online.
The arrest of 20 people followed the disappearance of a Chinese columnist Jia Jia who was reportedly went missing while boarding a flight to Hong Kong from here.
BBC quoted an unidentified staff member at Wujie as saying that in addition to Jia Jia another 16 people have been "taken away".
A well-known Chinese dissident Wen Yunchao living in the
US said three members of his family, living in China's Guangdong Province, had also been detained in connection with the letter, the report said.
Wen said he believed his parents and his brother had been detained because authorities were trying to pressure him to reveal information. But he told the BBC that he knew nothing about the letter.
It's appearance on the website coincided with the China's fortnight long Parliament session which ended on March 14.
The appearance of the letter also coincides with a string of high-profile censorship incidents, amid government's efforts to further tighten the control of the state media focussing on furthering Xi's image.
Xi himself emphasised government control of the media with a visit to top state media outlets recently where he stressed that news must "speak for the Party."
A Xinhua report referred to Xi as "last leader" which was later stated to be a typo error.