Bhushan, a senior Supreme Court lawyer, himself clarified that his views had been twisted and that any reference to a referendum should not be construed as a plebiscite on Jammu and Kashmir's merger with India.
"The AAP (Aam Aadmi Party) is of the view that Kashmir is an integral part of India. Needless to say I share this view," he said in a statement here.
"Any reference to referendum shouldn't be misconstrued to mean plebiscite on Kashmir's relationship with India," he added.
As the Bharatiya Janata Party (BJP) mounted a fierce attack on Bhushan and the Congress and CPI-M too made critical comments, Kejriwal said the AAP did not agree with the referendum call.
"Deployment of army (in the Kashmir Valley) is a matter of internal security. There is no question of having a referendum on it."
Kejriwal, however, added: "The feelings of the local people should be taken into account, otherwise it will be a threat to democracy. But our party is not in favour of any referendum."
The Congress, which props up the AAP government, earlier asked the new party to clear the air.
Harsh Vardhan, who heads the Bharatiya Janata Party in the Delhi assembly, dubbed Bhushan's views as "anti-national". "How can anyone have the guts to say all this on Kashmir?"
The most serious attack on Bhushan came from BJP's Arun Jaitley, who utilized the opportunity to blame Jawaharlal Nehru, India's first prime minister, for "mismanagement" of the Kashmir issue.
"The suggestion that the issue of army presence in Kashmir be decided by a referendum of the people in the valley must be opposed," he said.
"Issues relating to Jammu and Kashmir were substantially decided by Nehru. The effects of his mismanagement of Jammu and Kashmir continue to leave their impact even today," he said in his blog.
Without naming Bhushan, Jaitley said: "The same leader had two years ago suggested a plebiscite in Jammu and Kashmir where people must be free to decide whether they wish to stay with India or otherwise.
"The issues of national security cannot be decided by populism or referendum. They can only be decided on security considerations," he said.
Jammu and Kashmir Chief Minister Omar Abdullah added that governments don't "need to conduct a referendum (on) every tricky situation".
The Communist Party of India said army deployment must be decided by the government and cannot be an issue of public debate.
"These decisions are taken by those in power, these are not matters of public debate," CPI-M leader Sitaram Yechury said.
Under attack, Bhushan said Monday that Jammu and Kashmir was an integral part of India. But he said that the deployment of armed forces in large numbers in the state must be done with people's wishes.
He said it was his view that the deployment of armed forces "in huge numbers within Kashmir not for external defence or to prevent infiltration but for the security of the people ... should not be done without the consent of the people of Kashmir.
"Of course the union government is fully entitled to deploy the army for external defence in Kashmir as well as protecting the minorities there if there is a threat to minority rights.
"It is the prerogative of the state to deploy security forces including armed forces for any stretch (of time) to internal and external security.
--IANS (Posted on 06-01-2014)