Sirisena called for January polls after it was clear Rajapaksa wouldn't command majority in legislature, a move opponents called illegal.
Colombo: Sri Lanka plunged deeper into crisis on Saturday after President Maithripala Sirisena called a snap election, leaving the country facing a further two months of damaging political paralysis with a pair of bitter rivals claiming to run his government.
In what opponents condemned as an illegal move, Sirisena dissolved parliament on Friday and announced a January election after it became clear his designated Prime Minister -- former president Mahinda Rajapaksa -- would not be able to command a majority in the current legislature.
Rakapakse and ousted premier Ranil Wikremesinghe, who has refused to leave his post, have been battling for power for two weeks as international concern grows over the mounting turmoil in the strategically important island nation.
Sirisena signed a decree dismissing the island's 225-member assembly and scheduled parliamentary elections for January 5, nearly two years ahead of schedule.
In a bid to head off any revolt against his action he also suspended parliament.
There was no immediate comment from Wickremesinghe, but his United National Party (UNP) said it will challenge Sirisena's sacking of the legislature.
"This dissolution by the President is illegal and goes against the constitution," the UNP said on Twitter. "We will be fighting this to ensure that democracy reigns supreme in the country."
"He has robbed the people of their rights and the democracy that we have enjoyed," the UNP said.
Sirisena had come under increased international pressure from the United States, the United Nations and the European Union to allow parliament to vote on which Prime Minister should form a government.
Washington swiftly criticised Sirisena's latest move.
"The US is deeply concerned by news the Sri Lanka parliament will be dissolved, further deepening the political crisis," the US State Department said in a statement on Twitter.
"As a committed partner of Sri Lanka, we believe democratic institutions and processes need to be respected to ensure stability and prosperity," it said.
'Against the constitution'
Sirisena's United People's Freedom Alliance (UPFA) admitted ahead of the president's stunning announcement that they had failed to secure enough cross-over MPs to win a confidence vote.
By avoiding a test of his majority on the floor of the House, Rajapaksa will remain caretaker Prime Minister until elections are concluded and a new parliament meets on January 17.
Before signing the order sacking the parliament with effect from Friday midnight, Sirisena also inducted more ministers into his cabinet.
"At the moment we have 104 or 105 MPs," UPFA spokesman Keheliya Rambukwella told reporters, adding that the Sirisena-Rajapaksa group hoped to secure support from "crossover" legislators.
The admission, which came despite Sirisena's earlier claim that he had the support of 113 legislators when he sacked Wickremesinghe, had fuelled speculation that he would go for snap elections.
The leftist People's Liberation Front (JVP), which regards the sacking of Wickremesinghe as unconstitutional, accused Sirisena of trying to consolidate his power grab.
"Dissolving parliament at this time is illegal and goes against the constitution," JVP general secretary Tilvin Silva told reporters.
Sirisena suspended parliament to give himself more time to engineer defections, according to the opposition.
Several legislators have said they were offered millions of dollars to switch allegiance and at least eight have already jumped to the president's side.
Wickremesinghe, who has not left his official Temple Trees residence since his sacking, maintains that the action against him was unconstitutional and illegal, and insists his group can muster a majority.
Under pressure from the United Nations, United States and the European Union to allow a parliament vote, Sirisena agreed three times to lift the suspension but changed his mind each time.
The EU said on Friday, before the dissolution, that the crisis had scarred the Indian Ocean island's international reputation.
The EU, in a joint statement with Norway and Switzerland, called for parliament to reconvene and hold an immediate vote.
"Any further delay could damage Sri Lanka's international reputation and deter investors," the statement said.
Wickremesinghe late on Thursday thanked his supporters and urged them not to give up in the showdown.
"You have not let this country be plunged into the darkness of dictatorship. For this inspiring effort, I want to thank everyone who has risen to fight for democracy and justice," Wickremesinghe said in a video posted on Facebook.
The power struggle on the island of 21 million people has paralysed much of the administration, according to legislators on both sides of the dispute.