"It's not Kejriwal or any political opponent, I need to worry about...Third rate people in India are doing third rate things... All this is being done as they want to launch their own party and they want to take over the country... We will fight tooth and nail, won't give into these blackmailers," Khurshid told a television channel from London.
Khurshid and Kejriwal are engaged in an angry verbal joust over alleged financial malpractices in the Zakir Hussain Memorial Trust, which is headed by Khurshid and run by his wife Louise -- that is meant to help people with special needs in his home state of Uttar Pradesh.
The allegations were aired recently in a sting carried by the Hindi news channel Aaj Tak, which claimed that the NGO forged signatures of government officials to attest that the funds were being used as intended.
Kejriwal has been gunning for Khurshid's resignation from the Union Cabinet ever since.
His "remove Khurshid" call found new vigour on Saturday after a draft report by the Comptroller and Auditor General pointed out several irregularities in the utilisation of central grants given to the trust.
The draft report claims that in 2009-10, a central grant of Rs 71.5 lakh -- meant for distributing aid and appliances to differently-abled people in 17 districts of Uttar Pradesh -- wasn't fully utilised, with the trust giving out wrong information.
The draft also suspects fraud in the accounts of Khurshid's trust.
Emboldened by the contents of the report, Kejriwal said: "The distribution had to be done in 17 districts...The district officers in 10 districts sent reports saying the signatures were forged, in some instances the posts were made up... A show cause notice was sent to Louise Khurshid on June 3, 2011 which says out of the 17 districts, in the case of 10 districts the documents have been found to be forged."
The Khurshids, though, have stoutly denied all allegations.
"We have pictures of the officials who said no camps were held...will show them on Sunday," Khurshid said on Saturday.
Earlier, Louise Khurshid said that she did not believe any signatures have been forged, and added that her husband seemed to have been made a victim of a conspiracy.
She asked: "Why should Salman resign, what has he done wrong?"
Describing Kejriwal as an "ambulance-chaser", she dared him to visit the camps run by her NGO to prove the alleged bunglings.
"Let Kejriwal face the beneficiaries of our camps in 17 district. He would want anyone walking on the street to resign if that person didn't agree with him," she said.