The invention relates to a process for the preparation of melt processable liquid crystalline terpolyesters of the general formula by the in situ acetylation of a monomer selected from (4-hydroxyphenyl) acetic acid/ 3(4-hydroxyphenyl)propionic acid and hydroquinone/4,4′-biphenol/2,6-naphthylene diol followed by acidolysis polycondensation with or without a solvent and a catalyst, under reduced pressure for the efficient removal of acetic acid to effect higher molecular weight formation. Post polymerisation is effected at higher temperatures below the decomposition temperature purification by soxhlet extraction using solvent mixtures selected from acetone-alcohol, acetone-methylethyl ketone.