A process for preparation of 4-fluoro-α-[2-methyl-1-oxopropyl]-γ-oxo-N-β-diphenylbenzene butane amide also known as a diketone intermediate of atorvastatin, completely devoid of impurities 3,4-difluoro-α-[2-methyl-1-oxopropyl]-γ-oxo-n-β-diphenylbenzene butane amide; methyl, 2{-2[-(4-fluorophenyl)-2-oxo-1-phenylethyl)]}-4-methyl-3-oxo pentanoate; 1,4-bis(4-fluorophenyl)-2,3-diphenylbutane-1,4-dione, 1-(4-fluorophenyl)-2-phenyl ethanone; 1-(4-fluorophenyl)-2-phenyl ethanone and containing about 0.05% or less of 2-methyl-1-oxopropyl]-γ-oxo-N-β-diphenylbenzene butane amide. In that process the said diketone intermediate of formula 1 is obtained by maintaining temperature −25° C. to 50° C. during Friedel-Crafts acylation, in situ halogenation of formula II in presence of a solvent and nucleophilic substitution from a compound of formula III with formula IV in presence of a base.