"The Bill approved by the Cabinet is to patronise corruption and an eyewash and should be withdrawn... it betrays the aspirations and expectations of people fighting against corruption," Kejriwal told reporters.
The government, he said, seemed to be in "grip of the corrupt."
"There is no provision in the bill to tackle scandals like mining, CWG, Adarsh Society, and the cash-for-vote scam.
"Even the Lokpal Selection Committee will have overwhelming representation by the government with five of the nine members," Kejriwal, who won the Magsaysay Award in 2006 for activating the Right to Information movement at grassroots, said.
He said some "corrupt ministers" prevented the Prime Minister, who showed inclination to be brought within the ambit of Lokpal, to be included.
Referring to reports of the government promulgating prohibitory orders at all important places like Jantar Mantar and India Gate in New Delhi ahead of protests against the Bill on August 16 as announced by Gandhian Anna Hazare, Kejriwal said, "It will be treated as murder of democracy as everybody has a right to hold a peaceful demonstration.
"We are ready to face any eventuality for holding protest as the structure of the Bill is wrong. If required we will go to the Supreme Court."
The Union Cabinet yesterday cleared the much-debated Lokpal Bill keeping the office of the Prime Minister outside its purview notwithstanding incumbent Manmohan Singh's insistence on subjecting himself to its scrutiny.