Yesterday the palace, today the suburbs for deposed king of Nepal

The world's last Hindu monarch has handed in his sceptre and jewel-embossed crown of peacock feathers, left his palace one last time and had his first experience of life as a citizen.

However, the former King Gyanendra of Nepal – Mr Shah from now on – will be an extremely wealthy citizen who will be permitted, for now at least, to live in a former summer palace.

Mr Shah left Narayanhiti palace in the centre of Kathmandu in an armoured black Mercedes yesterday evening and made his way to the edge of the city where he will live until he finds a permanent home. A small crowd of royalists gathered to protest that he should not be forced out but reports said most people appeared glad that the unpopular king was leaving.

Shortly before leaving the palace, the former king, whose family has sat on the throne for the past 239 years, held his first press conference. He said he was reconciled to his new life and had no intention of leaving Nepal, where he has considerable business interests.

"I have no intention or thoughts to leave the country. I will stay in the country to help establish peace," he said, with two stuffed tigers standing behind him. "I would like to live in my motherland and contribute in whatever way possible to the greater good."

The monarchy was formally abolished last week after a new parliamentary assembly held its first session following national elections in April – its first scheduled task having been to declare Nepal a republic.

That move was inextricably linked to a peace deal to end a civil war in which Maoist rebels had fought against government forces in 10 years of violence that had led to the deaths of up to 13,000 people. A peace deal in 2006 sought to bring the Maoists back into the political mainstream, but they insisted that Nepal had to become a republic.

His old home...

Much of the original pink palace is 200 years old but the Nepalese royals built a concrete edifice on the site in the 1970s. The palace, scene of a royal massacre in 2001, has a pagoda roof and a hall with two rhino heads, two stuffed tigers, a stained-glass window depicting a peacock, and portraits of Nepalese monarchs.

...and his new one

The former king's new home is a complex of around a dozen concrete houses and huts situated on a forested hillside five miles north-west of Kathmandu. It is not exactly modest, being a summer and hunting retreat of the former king's ancestors. Mr Shah, as he is now known, will have 75 guards for protection.