Chidambaram said the DMK had demanded amendment to be moved by India in the UNHRC when the resolution (sponsored by USA on Lankan war crimes) comes up and also that the parliament in India should adopt a resolution on Sri Lanka situation and the latter is under active consideration.
He said the government is stable and would not fall.
"We take note of that [pullout] but let me assure everyone that the stability of the government and the continuance of the government are not an issue. The government is absolutely stable and enjoys majority in the Lok Sabha," said Chidambaram.
"There is no crisis, there is an ally who has withdrawn support and as I said the decision can be reviewed if the parliament adopts a resolution," said Chidambaram.
He said the demands of the DMK are under consideration and consultation has begun on the suggestion that parliament should adopt a resolution. He said all other parties have to be consulted on the parliament resolution.
Chidambaram said the draft of the UNHRC resolution is being examined by the government as well.
DMK, which was the biggest ally of the UPA after the Trinamool Congress walked out, said it would not lend outside support too. Five DMK ministers will quit the government.
The UPA has been reduced to a minority after the exit of 18 DMK MPs. The UPA with outside support of SP (22 MPs) and BSP (21 MPs) has 277 members now in Lok Sabha (270 is the halfway mark) after the pullout.
After the pullout there were celebrations in Chennai outside the DMK party office.
The DMK wanted India to go for a strongly worded resolution against Sri Lanka for its atrocities and killings of ethnic Tamils in Sri Lanka that followed after the civil war in that country ended with the defeat of the LTTE.
"I am pulling out of the UPA government," said DMK chief M Karunanidhi in Chennai. He said he felt let down by the government and it has always worked for the Tamils.
"Sri Lanka has committed serious crimes and the DMK has always condemned these crimes, " said Karunanidhi.
The UPA is now dependent only the the Samajwadi Party of Mulayam Singh Yadav and his rival Mayawati's Bahujan Samaj Party (BSP).
The opposition reacted immediately holding that UPA has lost the mandate to run the nation.
"The countdown of UPA government has started. The government has failed on the human rights issue of Sri Lankan Tamils," said opposition BJP leader Ananth Kumar.
The DMK earlier had asked the Indian government to amend a U.S. sponsored resolution to incorporate the demand for international probe and time-bound action against those who may be found guilty of war crimes in Sri Lanka.
Karunanidhi on Sunday had threatened to snap ties with the UPA if the Centre did not heed to DMK's demands against Sri Lanka.
"If our demands are not met, it is doubtful whether our ties with the alliance (UPA) will continue...It won't continue is sure," Karunanidhi had told media.
The government, which has not taken a clear stance over the Lankan Tamils issue, on Saturday attempted to placate the DMK with Union Minister V Narayanasamy saying the Prime Minister would "definitely consider all aspects" before taking a decision on the resolution.
On Sunday, External Affairs Minister Salman Khurshid said a decision by the government on voting on the UN resolution on Sri Lanka will be taken after consulting all UPA partners.
The issue of Sri Lankan war crimes was re-ignited recently after photos of the alleged cold-blooded killing of Liberation Tigers of Tamil Eelam (LTTE) chief Velupillai Prabhakaran's 12-year-old son came to light.