He also alleged that Trinamool leaders were involved in cash-for-job scandals.
"Mamata Banerjee is claiming her party won't be involved in extortion. But party cadres are extorting money from people before my very eyes," Rabindranath Bhattacharya, lawmaker from Singur, told a local news channel.
"I believe she (Banerjee) knows all these," said Mr Bhattacharya, who has been upset since he was moved from the agriculture ministry to the lightweight statistics and programme implementation department last week.
"In my area some leaders holding responsible posts have taken money from candidates who had applied for two vacant posts in a school. This has pained me," he said.
The septuagenarian retired head master was Ms Banerjee's trusted aide during the 2007 peasant movement in Singur area where a Tata Motors' Nano car plant was under construction.
The Singur movement against the Left Front's acquisition of farm land for setting up the car manufacturing plant played a key role in the Trinamool Congress' victory in last year's assembly elections.
The minister's comments come close on the heels of the Chief Minister's claim that she did not need "cut money" to run her party.
"The Trinamool Congress does not need money from the government. We will contest elections by raising money by selling my paintings," Ms Banerjee said during an official programme on Saturday.
While it has been an unwritten rule for all ministers to put up Ms Banerjee's photo in their chambers, Mr Bhattacharya said he never cared to do it.
"For me, Mamata is a gutsy leader. She is a great fighter. But she is not my idol. We put up portraits of great persons who we idealize. These are great men like Gandhiji, Jesus Christ, Netaji Subhas Chandra Bose."
Earlier, Mr Bhattacharya had threatened to resign from the ministry and quit politics over his ministerial transfer.
The Congress and the CPM are backing Mr Bhattacharya. State Congress chief Pradip Bhattacharya said, "What Mr Bhattacharya said is absolutely true. Trinamool Congress supporters are largely involved in extortion and police know it well. But they have kept mum because of pressure from cabinet members."
"The Chief Minister is well aware her party workers are engaged in extortion," said CPM politburo member Surjya Kanta Mishra.
After Ms Banerjee became Chief Minister, Mr Bhattacharya was initially handed the school education portfolio. But within a month and a half, he was shifted to agriculture.
Somewhat taken aback by Mr Bhattacharya's revolt and apprehensive of its fallout in Singur and her peasant votebank in the coming panchayat polls, Ms Banerjee has ordered shifting the venue of an administrative meeting in Hooghly district from its headquarters Chinsurah to the Block Development Office at Singur Nov 30.
Mr Bhattacharya's attack also comes at a time when a large number of Singur farmers, who had not accepted the cheques given by the erstwhile Left Front administration in return for giving away their land for the car project, were facing hard times.
These farmers, who were unwilling to give away their land, stood solidly behind Banerjee's movement after she promised to return 400 acres of the acquired area to them.
But 18 months into the Mamata regime, none of these farmers have got back their land following a prolonged court duel between Tata Motors and the state government on the issue.