The breakthrough was reached after Anna Hazare's close associates Arvind Kejriwal, Manish Sisodia, Kiran Bedi and Prashant Bhushan met Delhi Police Commissioner B K Gupta in a fresh initiative to iron out differences. The meeting took place at Commissioner Gupta's residence in Chanakyapuri's Satya Marg after midnight. Team Anna went back to Tihar Jail to brief Mr Hazare about their talks.
Reports suggest there will be no limits for how many people can gather at this base camp in support of Anna, though the police will review security and safety conditions continuously to ensure that those at the protest do not disrupt traffic or in other ways breach upon normal life for the rest of the capital.
Anna had vowed not to leave Tihar till he was guaranteed that the Government would not impose any conditions upon the mass-protest he wants to hold in Delhi. The police first said the protest would be illegal it if drew more than 5000 people or if the 74-year-old Anna's hunger strike extended beyond three days. Anna and his supporters said they'd defy police instructions and were on their way to launch their demonstration on Tuesday when they were arrested.
The Government has learnt to regret that decision. In Parliament and outside, the consensus has been that the arrests violated the fundamental right to peaceful protest. And India reacted with massive shows of support for Anna.
As evening fell upon Delhi on Wednesday, rush hour saw thousands of people gathering in different parts of the capital. A total of 10,000 people marched in groups between 4 and 6 pm from India Gate to Jantar Mantar , stating simply "Anna, hum tumhaare saath hain (we are with you, Anna)."
The crowd of nearly 2000 people outside Tihar Jail at 6 pm was more boisterous, roaring each time word spread that Anna and his aides had moved onto the next point in their lengthy negotiations with the Delhi Police. (Top surfer comments on Anna Hazare)
Mr Hazare knows his arrest and the overwhelming public support for him has given him considerable leverage. So when the police offered him Ramlila Maidan as a new venue Wednesday, he accepted; when he was asked to limit his protest's duration to 15 days, he did not.
Through the early evening, there were reports that Anna would wrap up his talks with the police and emerge from jail. But shortly after 6 pm, Ms Bedi told the crowd outside Tihar, "The talks with the Delhi Police are continuing...we've agreed on the venue but not the duration (of the protest)."
"We are not worried, we will find a way out of this", said the Prime Minister outside his home this afternoon. However, the decision to have Mr Hazare arrested has proved to be near-catastrophic for the government. Dr Manmohan Singh's statement in Parliament this morning explaining the background to the arrest was described as disappointing by the opposition. (Read: PM makes statement on Anna Hazare's arrest) | (Forum: What do you think of PM's statement?)
In a powerful attack, the BJP's Arun Jaitley charged the government of arrogance and of being advised by "too many lawyers" (a quick swipe at those like senior minister Kapil Sibal who have been countering Mr Hazare), Mr Jaitley said, "You have a serious political issue which is being debated for the last few months and climaxes in last few days...and we find that the political leadership of this country is hiding behind men in uniform...and telling us that the entire crisis was being handled by policemen." (Read: BJP rips apart PM's statement on Anna Hazare)
Mr Hazare was actually allowed by the Delhi Police to leave jail Tuesday night, about 12 hours after he was arrested. But he turned down the offer to head out of Tihar, insisting that he wants the government to first agree that his hunger strike will not be interrupted or his protest checked as long as it remains peaceful.
Among his visitors were spiritual guru Sri Sri Ravi Shankar and civil rights activist Swami Agnivesh. Outside, among the crowd, popular yoga guru Baba Ramdev, was seen standing atop a car.
Mr Hazare's hunger strike began Tuesday morning. Since then, he has had only water. Doctors have been examining him in prison.
The war between the government and Mr Hazare centres on the Lokpal Bill introduced in Parliament last week. The bill is meant to provide an antidote to the seemingly limitless corruption among politicians, bureaucrats and judges. Mr Hazare says the government has betrayed India by drafting a bill that has no intention of seriously and objectively investigating charges of venality. The BJP's Arun Jaitley stressed in Parliament that while his party has vast differences with Mr Hazare's suggestions for the bill, it does not agree with the "government-appointed Lokpal" that the current bill provides for.
Like Tuesday, the public support for Mr Hazare played out in different cities. In Bangalore, Freedom Park saw thousands of protestors. Mumbai's Azad Maidan was also filled during the day with supporters of Anna.