Jayalalithaa offered one seat each to the Communist Party of India-Marxist (CPI-M) and the Communist Party of India (CPI) out of the 39 Lok Sabha seats in the southern state.
Unhappy with the offer, the two parties announced they were calling off their alliance with the AIADMK for the Lok Sabha elections and would go to the hustings alone.
With the communist parties, who are Banerjee's bitter enemies, out of the way, the comfort level between the two leaders have increased, the sources said. Another important aspect is their areas of influence do not clash.
The Trinamool Congress, which has decided to field candidates in a number of states, opted to stay away from Tamil Nadu. Similarly, there is no AIADMK candidate in West Bengal.