The problem is quite simple but frustrating. When I try to visit a new file with C-x C-f which is named basis.m emacs keeps visiting the similar named file haarbasis.m which already exists in the same directory. It keeps prompting me for similar names and I am unable to visit a new empty file. I had recently installed elpy for a python IDE if it makes any difference.
How can I force emacs not to visit a file with C-x C-f unless I explicitly state which file to visit?
elpy loads idomenu which in turn loads ido. What you are describing sounds like ido-powered completion of file names. You can disable it after C-x C-f by pressing C-f.