The party's Polit Bureau which met here to chalk out the future course of action held Reddy "solely responsible" for the firing that killed six persons and gave a clear message to the Congress that the consequences will be serious if the "repression" continued.
"The firing took place on the direct instructions of the Chief Minister. He will have to go," a senior CPI(M) leader said and vowed to step up the three-month-old agitation in the coming days by organising protest demonstrations both in the state and outside.
"We demand the resignation of Reddy, appointment of a special commission for implementing the recommendations of Rangarao Committee on land reforms and withdrawal of all cases against party workers," he added.
The party also began an online campaign to drum up support against the state government in the form of a petition titled 'Condemn the police firing in Andhra Pradesh' and addressed to the President.
Meanwhile, senior CPI(M) leader from Andhra Pradesh Srinivasa Rao shot off a letter to Congress General Secretary Digvijay Singh rebutting some of his comments on the police firing in Mudigonda in Khammam district on Saturday.
Claiming that Saturday's road blockade by the party was peaceful, Rao said the Congress state leadership has embarked on a "disinformation campaign" that Maoists have sneaked into the land movement and are responsible for the violence.
He denied state Congress leaders' claim that Bandi Ramesh, one of the leaders of the stir, was a Maoist.
Ramesh had earlier worked with the CPI(ML) New Democracy party and joined the CPI(M) after differences with his party, he said.
"His wife Bandi Padma has been the elected Sarpanch of Cherumari village for the last 10 years. Even today she is the sarpanch of that village. So, they are neither extremists nor were they underground at any point of time," he said.
He also accused the police of opening fire at protestors without warning and claimed the Chief Minister had earlier pulled up the police for not being firm on the party-led land distribution movement.
"It is now clear that the latest firing in Mudigonda is also a result of the Chief Minister's instigation of the police," he added.
Meanwhile, hundreds of CPI(M) and CPI(ML-Liberation) activists staged a demonstration here to protest the police firing.
There was a minor scuffle with police as CPI(M) activists tried to break the security cordon after which police used water cannons to disperse them.