Twice last month, 122 Sri Lankan legislators voted to remove Rajapaksa from the prime minister position, charging that his appointment was unconstitutional.
On Monday the Court of Appeal denied Rajapakse the authority to act as prime minister and stripped his cabinet of their powers, giving Rajapakse until 12 December to prove his legitimacy and that of his government.
Sri Lanka's President Maithripala Sirisena today said he has always taken decisions in the best interest of the country and will end the current political crisis within a week.
Sri Lanka's top court stayed the dissolution order pending a hearing on its constitutionality that starts on Tuesday, allowing parliament to resume meeting.
A second source in Sirisena's party said the president was looking for a "dignified exit" by withdrawing the dissolution order as the court was unlikely to rule in his favour.
The lawmakers, who command 14 seats and hold the balance of power in the legislature, met Sirisena to discuss the release of more than 100 Tamil detainees held in custody for several years without trial.
The crisis deepened on Friday when parliament voted to halt payment of ministers' salaries - a move to pressure the disputed government of Rajapaksa.
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"All we are saying is follow the Constitution", Mr. Wickremesinghe said, addressing media persons at Temple Trees, the official residence of the Prime Minister, which he continues to occupy since Mr. Sirisena controversially sacked him six weeks ago.
The decision by the Court of Appeal on Monday is the latest setback to Sirisena and Rajapakse, whose attempt to take power almost two years ahead of the next elections plunged Sri Lanka into crisis.
UNP leader Ranil Wickremesinghe says that if a General Election is necessary, a legal government should be established and a motion should be brought in the Parliament. Sirisena had complained about sharp political differences with Wickremesinghe.
The two rivals had been neck and neck trying to cobble together enough backing, negotiating with key legislators and trying to lure defectors.
After Rajapakse lost his first no-trust vote on November 14, the speaker declared that the country was left without a government.
The latest court ruling is yet another setback for Rajapakse, who ruled with an iron fist for a decade before being defeated by none other than Sirisena in a 2015 election.