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Maoist Prime Minister quits after army chief row

Nepal's leader accuses President of trying to stage a power grab

Nepal's political turmoil deepened yesterday when its Maoist Prime Minister Prachanda dramatically resigned, accusing the country's President of attempting to make a power grab.

Following 24 hours of political drama which saw the premier dismiss the army chief only for President Ram Baran Yadav to tell him to remain in his post, the Maoist leader announced live on television that he was standing down. "I have resigned from the cabinet," Prachanda said in his address. "We made enough efforts to forge a consensus but various forces were active against this and were encouraging the President to take the unconstitutional and undemocratic step."

The decision by the Maoists plunged Nepal into new uncertainty and raised fresh challenges for the stumbling peace process that has emerged following a decade of civil war. Analysts say the opposition parties will now try to form another coalition government – without the Maoists who won the most seats in last year's election – rather than looking to hold a fresh ballot.

"Prachanda's resignation was not expected but I would say that it was inevitable after he took the decision to go against the advice of the President [and fire the army chief]," said Maj Gen Dipankar Banerjee, director of the Institute of Peace and Conflict Studies, a think-tank in Delhi. "The Maoists will now try to stop the other parties from forming a government."

Hundreds of Nepali police in full riot gear patrolled major road junctions in Kathmandu yesterday but there was no evidence of any unrest. Earlier, thousands of Maoist supporters had demonstrated in a show of strength and the party said more protests would follow.

The Prime Minister's decision to fire General Rookmangud Katawal on Sunday followed a long-running dispute over the integration of thousands of former Maoist guerrilla fighters into the regular army. The 2006 ceasefire which opened the way for the former rebels to return to mainstream politics, agreed that room would be made for such fighters. But senior army officers, including General Katawal, have been strongly opposed to such a move.

The army chief appeared to have the support of the country's President, who comes from an opposition party and who – according to Nepal's interim constitution– is commander-in-chief of the army.

And the Maoists' allies were equally annoyed by the sacking. The Communist UML (United Marxist Leninist) party and the smaller Sadbhavana party, quit the government, leaving Prachanda with just a slim majority in parliament.

In the aftermath of the Prime Minister's resignation, the main opposition party, the Nepali Congress, and the Communist UML, said they could both try to form a new government. "We want a government of national consensus," Prakash Sharan Mahat, a Nepali Congress leader, told Reuters.