She threatened to stage a hunger strike in front of the Chief Minister Devendra Fadnavis's residence from Wednesday evening if he did not sack the minister and initiate action.
Addressing a press conference here, Damania also alleged that Khadse was in cahoots with NCP leader and former Irrigation minister Ajit Pawar.
The senior state BJP leader, when he was a minister in Shiv Sena-BJP Government in late 1990s, had conceived the Tapi Irrigation Development Corporation, and got awarded contracts to his relatives and supporters, she alleged.
Khadse was unavailable for comment.
The beleaguered minister is already facing an allegation that calls were made to his mobile from gangster Dawood Ibrahim's house in Karachi. Another allegation against him is that his family illegally purchased a plot near Pune which had been acquired by the Maharashtra Industrial Development Corporation.
He has denied all these allegations.