Kumar, who had resigned as Chief Minister in the wake of party's disastrous performance in Lok Sabha polls in May last year, was elected at a meeting attended by 97 of 111 JD(U) MLAs and 37 of the total 41 members of Legislative Council.
The meeting, called by party President Sharad Yadav, took place shortly after Manjhi's unsuccessful bid to have a Cabinet recommendation for dissolution of the Assembly.
Earlier, a last-ditch attempt was made for a patch up between Manjhi and the group led by Kumar but it failed.
Kumar's election at the meeting, dubbed by the Chief Minister as "unauthorised", paves the way for him to take over the mantle again by replacing Manjhi whom he had handpicked to after he had resigned.
At the Cabinet meeting convened by Manjhi just before the Legislature Party meeting, a proposal was mooted for dissolving the Assembly. It was supported by seven ministers besides Manjhi, while 21 pro-Nitish Kumar ministers opposed it, state Finance Minister Bijendra Yadav told reporters.
Kumar said Yadav will establish contact with Governor Kesrinath Tripathi to stake claim to form the government.
He said that majority was with him "and if needed, we will parade our majority numbers", apparently referring to support of RJD, Congress and CPI which takes his number well ahead of the majority mark in the 243-member Assembly.
Yadav said a total of 130 JD(U) legislators, comprising MLAs and MLCs, are in support of Nitish Kumar.
Notice had been sent to 111 MLAs and 41 MLCs for attending the meeting convened by Yadav. As expected, Manjhi, some ministers and legislators supporting him stayed away from it.
Addressing JD(U) legislators, he said he had been forced to accept the challenge in view of "dirty" politics played by the BJP against his party.
Kumar said he would take the fight against the BJP to its logical conclusion in the Assembly polls due later this year.
"Now I have accepted the challenge and I will lead from the front and take the fight against the BJP which is playing 'dirty trick' against his party to a logical conclusion in Assembly poll later this year," he said.
Kumar has assumed leadership eight months after he quit CM on May 19 owning moral responsibility for JD(U)'s poor show in the Lok Sabha election.
Apprehending that the BJP might play against him, Kumar said, "It will be seen whether people in power today hold value of democracy or try to throttle democratic values."
He asked MLAs to be present in Patna to fight out any "foul" play against them.
In the JD(U) Legislature Party meeting, Masaurhi MLA Arun Manjhi, considered a supporter of Manjhi, proposed Kumar's name, which was approved by the MLAs.
On Manjhi Cabinet's "proposal" for dissolving Assembly, Kumar said it did not enjoy the backing of a majority.
"The tradition is that even if one member registers protest on any item in the Cabinet it is withdrawn. Here 21 ministers are rejecting a proposal to recommend dissolution of the Vidhan Sabha," Kumar said.
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