The decision was taken by the BJP top brass after consultations even as there was speculation that it could go ahead with government formation by obtaining the support of some Independent MLAs, amongst others.
Sources said that the BJP brass was convinced that since it does not have the numbers to form a stable government, it would be best to reject the offer of forming one.
Buoyed by BJP's recent successes in Maharashtra and Haryana, party leaders felt that seeking a fresh mandate was the best option in Delhi as it believes in playing clean politics and not indulging in any kind of "cheap" tactics and horse-trading.
"We do not believe in cheap politics. We do not have the numbers to form a government in Delhi. We will go by the decision of the LG and hope to form a government with a full majority," said BJP's national secretary Shrikant Sharma.
Delhi tonight appeared headed for Assembly polls after BJP, AAP and Congress told Lt Governor Najeeb Jung that they were not for the formation of a new government here while seeking a fresh mandate for ending the eight-month-long political uncertainty in the national capital.
Indications are that Jung, who met leaders of the three political parties, may send his recommendation to the President for dissolving the Assembly any time.
Sharma claimed that the party has not changed its stand on government formation ever since the Assembly polls last year.
He recalled that when the LG had invited BJP to form the government after the Assembly polls, the party had rejected the offer on the grounds that it did not have the numbers.
"Our stand continues to be the same which it was after the Assembly polls," he said, adding that, as and when the polls are held, BJP will form a government on its own to provide good and effective governance in Delhi.
He said it was after BJP rejected the LG's offer that AAP's Arvind Kejriwal formed an "unstable 49-day government" with the help of Congress, whom it had been attacking ahead of the polls for being corrupt.
"Kejriwal ran away from Delhi leaving a vacuum in the capital, after which President's Rule was imposed," he said.