With the Tripura Government refusing to entertain Nayanbashi Jamatia's political demands that included offering him the chief minister's post, the disgruntled rebel leader, who very recently talked peace, has changed track and had reportedly threatened to resume another phase of vigorous armed struggle in alliance with other militant outfits.

In March 2004, the National Liberation Front of Tripura (NLFT) faction led by Nayanbashi Jamatia  had declared a unilateral ceasefire with the security forces operating in the State. It generated some hopes for peace. About a month latter, on 15 April 2004, NLFT-NB signed a memorandum with the representatives of the State Government and Central Government in New Delhi, agreeing to the "cessation of hostilities" for six months beginning 15 April last. A day after signing the memorandum, Nayanbashi Jamatia called upon other militant groups to abjure the path of violence and join the peace process.

However, not long after, Nayanbashi Jamatia started showing signs of dissatisfaction as the Government of Tripura refused to entertain the political demands put forward by him, that included, among others, offering him the chief minister's post in the State and the reservation of 57 out of the 60 seats for tribals in the State Legislative Assembly. His other demands included upgradation of the Autonomous District Council (ADC) in Tripura to the status given to the Bodo Territorial Council in Assam, abolition of three seats reserved for non-tribals in the 30-member ADC, implementation of the Inner Line Permit (ILP) and the deportation of all illegal migrants who had entered Tripura after 1949.

However, a section of the Nayanbashi's own outfit appeared to have grown impatient with the demands of their leader and have preferred to continue the dialogue with the government. Another report suggests that the State police department managed to create a rift within the outfit as they found Nayanbashi too adamant. After three rounds of formal negotiations, a final settlement was reached and a Memorandum of Settlement (MoS) was signed on 17 December 2004 between the Union Government, the State Government of Tripura and the representatives of the NLFT-NB faction . The MoS was signed in the absence of Nayanbashi Jamatiya, who has opted out of the peace process due to the rejection of his political demands.

According to the MoS, NLFT (NB) would lay down arms by  25 December, abjure the path of violence, return to the mainstream and abide by the Constitution of India. The Government of India agreed in principle to provide a Special Economic Development Package of Rs 55 crores for the development of tribals in Tripura and a Special Rehabilitation Package for NLFT-NB returnees. Accordingly, on 25 December , a total of 138 NLFT-NB cadres surrendered before the Tripura Governor, D.N. Sahay, in capital Agartala.

However, Nayanbashi Jamatia, the rebel leader, had gone into hiding, probably in Bangladesh. In a notification issued on 31 December, the Tripura Government issued a notification warning Nayanbashi Jamatia to surrender  immediately or face the consequences. According to media reports, Nayanbashi Jamatiya has sought political asylum in Bangladesh and Myanmar.

In a fax message to the local media on 30 December, Nayanbashi Jamatia has appealed to the militant outfits in the northeast region not to come forward for peace talks with the Union government. In this message, he came down heavily on a number of "anti-peace loving police officers" for forcing the militants of his outfit to surrender. He also questioned these peace talks, which were concluded without his consent, as he is the president of the faction. Accusing the State government, he alleged that Rs 1 crore was paid to four top leaders of his faction (Bichindra Debbarma, Annan Debbarma, Dilip Debbarma and Dia Molsoom) to join the peace talks.

Earlier, in an interview to a private television channel shown on 29 December, he had warned of large-scale operations in the days to come. He also said the attack on Territorial Army jawans by the NLFT-BM cadres at Dangabari in the South Tripura district on 28 December as a reaction to the betrayal of the Borok people. He also warned that his newly floated the Indigenous Freedom Movement of Tripura (IFMOT) would spearhead attacks on a scale not witnessed between 1995-2004.

Reports quoting official sources have stated that Nayanbasi Jamatya has joined hands with the Biswamohan Debbarma faction of the NLFT, the Ranjit Debbarma-led ATTF and his own organisation IFMOT to float a new front called the Indigenous People's Triple Alliance (IPTA) to flush out "the infiltrator non-tribal population" from the State. Nayanbashi front, the sources said, is likely to launch Operation Rikhlai (deportation drive) soon.