Decolourization potential of white rot fungal organism, coriolus versicolor, was investigated in a batch reactor, for textile dye industry wastewater. The influence of process parameters like pH, temperature, agitation speed and dye wastewater concentration on the decolourization of textile dye wastewater was examined by using Response surface methodology (RSM). The maximum decolourization was attained at: pH- 6.8, temperature - $27.9^{circ}C$, agitation speed - 160 rpm and dye wastewater concentration - 1:2. From the analysis of variance (ANOVA) results it was found that, the linear effect of agitation speed and dye wastewater concentration were significant for the decolourization of textile dye wastewater. At these optimized condition, the maximum decolourization and chemical oxygen demand (COD) reduction was found to be 64.4% and 79.8% respectively. Various external carbon sources were tried to enhance the decolourization of textile dye wastewater. It was observed that the addition of carbon source enhances the decolourization of textile dye wastewater. Kinetics of textile dye degradation process was studied by first order and diffusional model. From the results it was found that the degradation follows first order model with $R^2$ value of 0.9430.