NEW DELHI - Delhi Chief Minister Arvind Kejriwal Tuesday accused his arch-rival Narendra Modi of waging a political vendetta, branding the Indian premier a "psychopath" after federal investigators raided his city administration's headquarters.

The CM, who founded and leads the anti-corruption Aam Aadmi party, is a bitter opponent of Modi and they have clashed repeatedly in recent months.

The Central Bureau of Investigation (CBI) confirmed officers had raided the Delhi city government headquarters and 13 other locations in connection with a corruption case involving Kejriwal's principal secretary Rajendra Kumar.

Civil servant Kumar, in a previous role, "abused his official position" by awarding government contracts to a favoured private firm over seven years, along with six others, CBI spokeswoman Devpreet Singh told reporters. Another official told AFP that cash and property deeds had been recovered from Kumar's home. News of the raid was broken by Kejriwal himself, who posted on Twitter that "CBI raids my office" and then accused Modi of being "a coward and a psychopath" who could not "handle me politically". Although his initial comments sparked an uproar, Kejriwal was unrepentant when he later addressed reporters.

"I have a message for Mr. Modi: 'You can't scare me. You have no idea what I'm made of. I won't be afraid even until my last breath'," he said. "My words may have been harsh but it is you who have committed the real misdeeds. "Why don't you apologise to the country for your misdeeds first and then I'll apologise for my words," Kejriwal added, in an apparent reference to Modi's refusal to apologise over deadly communal riots in Gujarat when he was chief minister in 2002.

The raid triggered chaos in parliament where Finance Minister Arun Jaitley said repeatedly that it "has nothing to do with Mr Arvind Kejriwal" and ridiculed the suggestion it was politically motivated.

"The search is in relation to a case for an alleged offence committed in his (Kumar's) capacity before he joined the office of Mr Kejriwal," he told the upper house of parliament, his voice drowned out by opponents.

Modi's right-wing Bharatiya Janata Party (BJP) demanded an apology from 47-year-old Kejriwal for his "unwarranted and shameful" description of the premier, while the CBI termed his claims "false propaganda".

The CBI is nominally independent but long suspected of being under government influence. It was described by India's top court in 2013 as a "caged parrot" that spoke "in its master's voice".

Kejriwal and Modi stood against each other in last year's general election in the Varanasi constituency. Although Kejriwal lost, he then oversaw a dramatic landslide victory over the BJP in polls in February for the Delhi state assembly.

The two men have since clashed repeatedly, with Kejriwal accusing the federal government of blocking a series of initiatives, including a new push to clean up the capital's polluted skies.

Kejriwal, a self-styled revolutionary, has also been pushing to be given control of the police force operating in Delhi in line with other state administrations. His calls have been rebuffed by the prime minister.

Mohan Guruswamy, head of New Delhi's Centre for Policy Alternatives think-tank, said he was not surprised by the raid given the history of tensions between the two men.

"It is a well-known fact Kejriwal is opposed to Modi... Kejriwal has opposed his brand of politics, economic policy and finds him the only political competitor in present political system," Guruswamy told AFP.

Although Kejriwal's party had a disappointing showing in the May 2014 parliamentary elections, the victory in Delhi bolstered its hopes of making major inroads elsewhere, especially as the main national opposition Congress party is in the electoral doldrums.

In October Kejriwal sacked one of his ministers for alleged bribe-taking, months after his law minister resigned following his arrest for acquiring a fake law degree.