Announcing his decision in his home turf Sindhudurg district in coastal Konkan region, Rane accused the Congress of reneging on the promise of making him the state's chief minister when he joined the party 12 years ago after leaving the Shiv Sena.
"I sent my resignation letter to Sonia Gandhi today," Rane said. "In the letter, I thanked them and haven't criticised either Sonia or Rahul Gandhi," he added.
The Maratha leader, who was the chief minister in 1999 while in the Shiv Sena, told a press meet here he had also resigned as a Member of the Legislative Council (MLC).
"I have not yet decided where to go," he said, referring to speculation about his joining the BJP, and added that he would make an announcement on this before Dussehra, which falls on September 30 this year.
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The former firebrand leader of the Shiv Sena joined the Congress on July 26, 2005, and was the next day made revenue minister in the then Congress-led government in the state.
"(Congress leader) Ahmed Patel had told me after I joined the party that I would be made the chief minister," Rane said.
During the recent Ganesh festival, Chief Minister Devendra Fadnavis had visited Rane's residence, further fuelling the speculation.
Rane said Nilesh Rane, his son and former Congress MP, had also resigned from the party. His other son Nitesh, a Congress MLA, had not quit yet, Rane said.
"But he will quit later, along with many Congress and Shiv Sena legislators," he added.
Mounting an attack on Maharashtra Pradesh Congress Committee president Ashok Chavan, Rane said he did not have "any qualification" to hold that post.
He added that while Rahul Gandhi had made him an MLC, Chavan was "camping in Delhi to ensure I didn't become one".
Rane, who has pockets of influence in the Konkan region of Maharashtra, was expelled from the Sena by then supremo Bal Thackeray after he voiced displeasure over the latter's son Uddhav gaining prominence in the party.
A tough talking leader, Rane, who was handpicked by Thackeray as chief minister when he decided to remove Manohar Joshi ahead of the 1999 Assembly polls, had recently claimed he had received an offer from the Sena to return to its fold.
"It's not about any post. I said I don't want to rejoin the Sena. If the Sena doesn't want me, why would the offer have been made," Rane had said.
The recent threat by the Sena to pull out of the BJP-led coalition government is being seen as an attempt to thwart Rane's entry into the BJP.
On the Sena's threat to withdraw from the government in Maharashtra, Rane had said, "This is the old style of Sena president Uddhav Thackeray".
Rane had said the Sena often enacted the "drama" of threatening to quit the government while enjoying the privileges of power.
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