Living poly [(2-dimethylamino)ethyl methacrylate] (PDMAEMA) has been synthesized by Atom Transfer Radical Polymerization (ATRP) of (2-dimethylamino)ethyl methacrylate in bulk at 30 degrees C using CuCl/N,N,N',N '',N ''-pentamethyldiethylenetriamine catalyst. Addition of catalytic amount of tricaprylylmethylammonium chloride (AQCl) keeps the deactivator cupric complex soluble throughout the polymerization resulting in controlled polymerization. The solubility of the charged copper complexes in bulk monomer is proposed through their entrapment within the ionic core of the reverse micelle like aggregates formed by AQCl, as observed from Cryo-TEM and dynamic light scattering analysis. An adventitious role of water molecules in respect of control over polymerization is noted when moist monomer or AQCl is used. Synthesized PDMAEMA molecules work efficiently as macroinitiators for the synthesis of different stimuli responsive, multifunctional di- or triblock copolymers through sequential polymerization. The diblock copolymer PDMAEMA-b-poly[di(ethyleneglycol) methyl ether methacrylate] stabilizes CdS quantum dots in aqueous medium which show stimuli dependent reversible switch between micelle 'core-confined' and 'corona-embedded' morphologies.