Hectic parleys over the ordinance started with Rahul Gandhi, who trashed the ordinance, meeting Prime Minister Manmohan Singh early in the day.
Hours later, the Congress core group, including party chief Sonia Gandhi, the prime minister and other senior leaders, who had earlier cleared the ordinance, discussed its likely withdrawal.
Shortly thereafter, the prime minister met President Pranab Mukherjee and briefed him on the deliberations at the core group.
The final call will be taken by the cabinet in the evening, said the sources.
The ordinance passed by the cabinet Sep 24 is with the president, who left on a week-long trip to Turkey and Belgium Wednesday.
Sensing that the Congress would score politically for withdrawing the ordinance, the Bharatiya Janata Party (BJP) said the prime minister should step down.
"The prime minister should resign," said BJP's Venkaiah Naidu.
Manmohan Singh Tuesday said he would not quit over the perceived undermining of his authority and that of his cabinet by Rahul Gandhi.
BJP leader Yashwant Sinha went a step further and said a bill to save the convicted lawmakers, referred to a parliamentary panel, should also be withdrawn.
"The bill should also be withdrawn," he said.
The Congress accused the BJP of doublespeak, saying the opposition party had during the all-party meeting supported the ordinance but changed stand after Rahul Gandhi raised the issue.
Parliamentary Affairs Minister Kamal Nath said: "It is unfortunate that ever since Rahul Gandhi raised the matter, the BJP has taken a different stand. This is the old style of BJP's functioning to say one thing in the public and another in private."
"In the business advisory committee meeting in the Rajya Sabha, they (BJP) had unanimously agreed to the ordinance and so it was introduced in the Rajya Sabha," he said.
Samajwadi Party (SP), which supports the UPA from outside, opposed withdrawal of the ordinance.
Targeting Rahul Gandhi, Rajya Sabha member and senior SP leader Naresh Agarwal said if the ordinance is withdrawn, it will prove that the Gandhi scion is bigger than the government of India.
In Lucknow, Uttar Pradesh Chief Minister Akhilesh Yadav said: "It is not good to point fingers at each other. We will have to admit that corruption is a big bane, and we need to weed it out."