Amidst high drama, 32 TDP MLAs, including party president N Chandrababu Naidu staged a demonstration near the Speaker's podium after the House was adjourned.
Refusing to leave the premises, the combative Opposition members continued their protest and spent the entire night in the inner lobby of the Assembly.
Naidu and his colleagues slept on the floor and were preparing to corner the Congress government on the MSP issue as soon the House assembles on Monday, the last day of the 10-day winter session.
In spite of repeated appeals by Speaker K R Suresh Reddy to vacate the premises, the slogan-shouting TDP legislators continued their sit-in near the podium and later in the night moved to the inner lobby where they had dinner together.
As the night wore on, the Assembly staff went through some anxious moments with the legislators declaring that they would continue the dharna throughout the night and proceed straight to the House the next morning.
The Opposition TDP members have been demanding a hike in the MSP of paddy to Rs 1,000 per quintal, to bring it at par with wheat.
The TDP legislators said that they would continue the demonstration till Chief Minister Y S Rajasekhar Reddy gave an assurance to this effect in the House.
The MSP issue had rocked the Assembly on Monday with the TDP members frequently storming the podium and stalling proceedings, prompting the Speaker to abruptly adjourn the House after rushing through a string of government Bills.
Soon after the House was adjourned, the TDP members sat in demonstration and refused to budge from their position, insisting on the Chief Minister's statement on increasing the MSP.
Large number of TDP leaders and supporters tried to enter the Assembly premises to express solidarity with the agitating legislators.
Scores of Opposition activists were arrested, bundled into the waiting vehicles and taken to nearby police stations.
"We are fighting for justice for farmers. If the government fails to give assurance today, we will intensify the agitation across the country," said Naidu.
Following representations from all political parties and farmers' organisations in the state, the Union government had recently announced a bonus of Rs 50 per quintal, over and above the MSP fixed at Rs 725 per quintal.
Meanwhile, expressing solidarity with the agitating TDP members, MLAs of other Opposition parties are planning to take out a padayatra on Tuesday morning.
The government has come under increasing pressure as the MSP issue has become a rallying point for the Opposition.
The chief minister is expected to make a statement in the House later in the day, detailing his government's efforts to convince the Centre on the need to hike MSP for paddy.
He is likely to introduce a resolution requesting the Centre to implement the recommendations of the Swaminathan Commission on agriculture.
Reddy had recently taken up the MSP issue with Prime Minister Manmohan Singh and submitted a memorandum to him requesting that MSP for paddy be increased to Rs 1,000 per quintal.