Lalu Prasad, who was authorised by the RJD legislature party earlier to take the decision, nominated Tejaswi Yadav, a first time MLA from Raghopur seat in Vaishali, as RJD Legislature Party leader in the Assembly, his close aide and MLA Bhola Yadav told PTI.
The RJD chief's wife Rabri Devi will head the legislature party of the bicameral body.
While Tejaswi Yadav is the Deputy Chief Minister of the state, Rabri Devi is a member of state Legislative Council.
After the recent Assembly poll, RJD is the single largest party with 80 members in the 243-member Bihar Assembly.
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The appointment of Tejaswi Yadav drew stinging remarks from opposition BJP.
New BJP Legislature party leader Prem Kumar, who is also leader of the opposition, told reporters that "it is an open display of dynastic politics".
"Nation has seen Lalu Prasad playing dynastic politics during 15-year-rule of RJD in the state from 1990 to 2005 and the same is continuing now," Prem Kumar said.
Tejaswi Yadav hit back at BJP, saying "when people have accepted us (he and his brother Tej Pratap Yadav) and elected us why is BJP finding fault?"
"I am aware of my huge responsibility and will try to perform to the best of my capacity," he told reporters.
"If BJP finds fault in my performance it has every right to criticise me," he said.
Former Chief Minister and Hindustani Awam Morcha (HAM) leader Jitan Ram Manjhi described the appointment as "internal matter of RJD".
"There is no bar on appointment of son of a politician to any post as per rules and we should not make personal comment on anybody," Manjhi told reporters.
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Tejaswi has also been alloted a room in the Assembly in capacity of being Deputy CM which was earlier in the name of senior BJP leader and ex-Deputy chief minister Sushil Kumar Modi.
Tejaswi sat in his room on the first floor for some time after the business of the House was suspended today due to death of RLSP MLA Basant Kumar.
RJD MLAs, including Lalu Prasad's close aide Bhola Yadav, and a host of party ministers flocked him in the room.
As per the pecking order, Tejaswi sat next to the chief minister in the Legislative Assembly. He was followed by his elder brother Tej Pratap, the third in the hierarchy in the grand secular alliance government headed by Nitish Kumar.
Senior RJD MLA Abdul Bari Siddiui, who is Finance Minister in the new government, first sat in the corner of the first row but after being told by JD(U) minister Bijendra Prasad Yadav to occupy his seat in accordance with the hierarchy came and sat next to Tej Pratap.