CBI Director Alok Verma and Special Director Rakesh Asthana have been "divested of all powers" amid an ongoing spat between them, sources said, calling it the first such case in the history of the agency.

As an interim measure, the Appointments Committee of the Cabinet led by Prime Minister Narendra Modi has given charge of the CBI to Joint Director M Nageswar Rao, an Odisha-cadre officer, with immediate effect, a government order said.

"The Appointments Committee of the Cabinet has approved that during the period of the subsistence of the aforesaid interim measure...M Nageshwar (sic) Rao, IPS, presently working as Joint Director, CBI, shall look after duties and functions of Director, CBI, and shall take over duties and functions with immediate effect," it read.

Reacting, BJP Rajya Sabha MP Subramanian Swamy said that CBI were about to ‘suspend ED’s Rajeshwar so that he cannot file the chargesheet against PC (P Chidambaram)’. He wrote: “The players in the CBI massacre are about to suspend ED’s Rajeshwar so that he cannot file the chargesheet against PC. If so I will have no reason to fight the corrupt since my govt is hell bent on protecting them. I shall then withdraw from all the corruption cases I have filed.”

On Wednesday, in an official statement on the ongoing crisis in the country’s top investigating body, the Ministry of Information and Broadcasting said it had received a complaint on August 24, 2018 containing allegations against senior functionaries of CBI.

It stated: “CVC on receipt of a complaint on Aug 24,2018 containing various allegations against senior functionaries of CBI has served 3 separate notices (under section 11 of CVC Act, 2003) on Sept 11 upon Director, CBI to produce files and documents before Commission on Sept 14.

Various opportunities have been given to produce such records and after several adjournments, though CBI assured the Commission on 24th Sept 2018 to furnish the records within three weeks. Despite repeated assurances and reminders, the Director, CBI failed to furnish the records before Commission. CVC has observed that Director, CBI has not been cooperating in making available records sought by the Commission relating to serious allegations”

The government's decision to remove CBI Director Alok Verma and Special Director Rakesh Asthana is based on the CVC's recommendations, Finance Minister Arun Jaitley said Wednesday, asserting that it was absolutely essential to restore the agency's institutional integrity and credibility.

The Central Vigilance Commission made its recommendations last evening, he said.

Jaitley told reporters that allegations by the top two officers of the country's premier investigation agency led to a "bizarre and unfortunate" situation.

A Special Investigation Team will probe the charges and both persons will "sit out" as an interim measure, he added.

It is an extraordinary situation, and the accused cannot be allowed to be in charge of investigation against them, the minister said.

He also dismissed as "rubbish" allegations of opposition parties, including the Congress, that Verma was removed because he wanted to look into the Rafale fighter jet deal.

In a swipe at them, Jaitley said their allegations indicate they had access to what was going in the mind of the officer concerned, an apparent reference to Verma.

That itself demolishes the integrity of the person they are trying to support, he said.

The Congress Wednesday accused Prime Minister Narendra Modi of interfering in the working of the CBI and wondered if its Director Alok Verma was "sacked" for his keenness to probe the "layers of corruption" in the Rafale scam.Congress chief spokesperson Randeep Surjewala said the Modi government has put the "last nail" in the independence of the CBI by removing Verma.

Systematic dismantling and denigrating of CBI is now complete. Once a premier investigating agency, PM ensures that CBI's integrity, credibility and reliability is 'buried and dead', he wrote on Twitter.

Has the CBI Director been sacked for his keenness to probe the layers of corruption in Rafale Scam? Isn't the rest a shoddy cover up? Let PM answer, he said in another tweet.

Finance Minister Arun Jaitley, however, dismissed as "rubbish" allegations that Verma was removed because he wanted to look into the Rafale fighter jet deal.

He said the government's decision to remove Verma and Special Director Rakesh Asthana is based on the Central Vigilance Commission's recommendations.

Former Law Minister M Veerappa Moily said the removal of the CBI director was illegal, unethical and unconstitutional .

The Congress on its official Twitter handle asked, "Why has the government removed CBI Director Alok Verma of his charge and sealed his offices? Who are they protecting and what are they hiding? Congress leader Manish Tewari said according to the Lokpal Act and the Supreme Court judgment in the Jain Hawala case, the CBI director has a fixed tenure of two years."

Government cannot curtail tenure/take interim measures without a meeting of Committee consisting of PM, CJI and leader of Opposition/single largest party, he posted on Twitter.

Surjewala alleged in a tweet: Scared of the Rafale Scam probe, Modi ji is killing India's premier investigation agency. "Officers are being removed in hordes and fascism prevails. Can't save the sinking 'Sultanate' by it. Modiji, why are you so scared of the Rafale probe? he tweeted.

The Congress leader also termed the transfer of the agency's Deputy SP Ajay Bassi to Port Blair as Saja-E-Kala paani by an autocratic Modi ji .

Illegality, interference and unconstitutionality of Modi government has hit a 'new low'. Speaking truth to power has become a crime under this dictatorial regime, Surjewala tweeted.

The prime minister has demonstrated the true colour of his infamous 'Modi Made Gujarat Model' by this cloak-and-dagger mugging of the CBI, he alleged.

"PM Modi seeks to achieve surreptitiously and clandestinely what he can't do directly to sack the CBI Director. Habitual and perpetual misuse of CBI by Modi Government and BJP to tamper fair investigation of serious criminal cases is the reason for this unfathomable mess, he alleged.