NCP chief Pawar and senior leader Patel met Prime Minister Manmohan Singh and Congress President Sonia Gandhi and discussed the week-long stand-off and it was decided to set up an "effective coordination mechanism" to be headed by Gandhi.
The two leaders had sent their resignation to Singh last week expressing concern over the way the alliance was functioning and demanding better coordination.
They skipped the Cabinet meeting and also kept away from their respective ministries. Yesterday, an NCP leader had issued a veiled threat to the UPA leadership that it may be forced to withdraw from the government if there was no solution forthcoming.
Indications of a thaw emerged during the day when Singh spoke of give and take in coalition and of addressing NCP's concerns. Then followed the meeting at his residence.
A statement issued by the two parties later said "this mechanism would ensure that the UPA allies meet at least once a month to discuss policy and other issues".
The leaders also decided to activate the coordination mechanism, already in existence, very soon to ensure the smooth functioning of the Congress-NCP coalition government in Maharashtra.
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"The leaders reiterated their resolve to further strengthen the UPA," the statement said.
This is the first time in eight years of the UPA government that a coordination committee of alliance partners is being formed. During UPA-I, there was only a coordination committee between Congress and Left parties. (MORE)