Kumaratunga, 58, is a daughter of two prime ministers. Her father, Solomon Bandaranaika, was prime minister and her mother, Srimavo, was the world's first female prime minister.
She was elected in 1994. But since December 2001, after her party was defeated by arch rival Prime Minister Ranil Wickremesinghe, she has been ready to pounce.
The crisis came to a head this week when she sacked three senior ministers and suspended parliament as Wickremesinghe was away in Washington for a meeting with US President, George Bush, on the island's peace process.
She claims credit for inviting Norway to help bring Tamil Tiger rebels to the peace negotiating table even after losing her right eye in a Tiger suicide assassination attempt in December 1999.
But her peace attempt was put on hold in April 2001 amid renewed fighting in the island's north.
Kumaratunga has been highly critical of Wickremesinghe's handling of the Oslo-led peace initiative.
She has also accused the US and Japan of trying to "reward terrorism” by attending an aid pledging conference in Oslo in November last year and charged Norway with overstepping its brief.
Constitutionally Kumaratunga, elected directly by the people in an election separate from parliamentary polls, has unfettered powers to sack the government and call snap elections.
Wickremesinghe's 23-month-old government can, in theory, remain in office until December 2007, the end of its six-year term.
But Kumaratunga, whose own six years are up in December 2005, can cut that short.
“I can sack the prime minister by issuing just one letter. He and his entire cabinet will have to go if I do that and I know the entire world will support my decision”
Chandrika Kumaratunga, Sri Lanka's President
Kumaratunga faces a political dead-end. She cannot offer herself for re-election after December 2005, as she would by then have completed the maximum two terms allowed by the constitution.
Diplomats say a way out would be for her to re-write the constitution, but that would require a two-thirds majority in the legislature which she does not enjoy, but hopes to muster with the help of Marxists.
Peace talks stance
Asian and Western diplomats have expressed concern that the new political turmoil could be a blow to the ongoing peace efforts, but Kumaratunga has tried to address fears by saying she is committed to talks.
In a televised address, Kumaratunga said she was willing to enter negotiations with the rebel Liberation Tigers of Tamil Eelam (LTTE) whose blueprint for peace was rejected by her party.
Kumaratunga faults Wickremesinghe for lifting a 1998 ban on the Tigers and entering into a truce without her approval and allowing the rebels to import sophisticated radio equipment.
“If a doctor is not treating the patient well and is trying to kill the patient, isn't it the duty of the doctor's boss to sack him? That is the question that I ask myself," Kumaratunga said at the time.
“I can sack the prime minister by issuing just one letter. He and his entire cabinet will have to go if I do that and I know the entire world will support my decision.”
But for the time being there are only expressions of concern- from UN Secretary General Kofi Annan, the US, neighbour India and the European Union.