August 14, 2011 / 5:55 PM / 6 years ago

Nepal PM quits, political turmoil seen

KATHMANDU (Reuters) - Nepal’s Prime Minister Jhalanath Khanal resigned Sunday pushing the country back into turmoil as political parties scrambled to form a new coalition government and draft a new constitution.

Khanal, a moderate communist, was elected six month ago and vowed to carry out the promises made in a 2006 peace deal with Maoist rebels.

But political in-fighting blocked his attempts to help thousands of ex-Maoist fighters living in camps, and to prepare Nepal’s first republican constitution after the monarchy was abolished in 2008.

“I have resigned to pave the way for a national consensus government,” Khanal told reporters after tendering his resignation to President Ram Baran Yadav.

Nepal has been in political turmoil since Maoist leader Prachanda quit as prime minister in 2009 in a conflict with the president over the control of the national army.

The former guerrillas, who dominate the parliament but lack the majority to rule on their own, are insisting on heading a new coalition government which must decide the fate of more than 19,000 former guerrillas and oversee the preparation of the new constitution within three months.

But other political leaders say the Maoists must first disarm and dismantle their army camps before they are allowed to form a new coalition, a condition the former rebels have so far refused.

The stalemate has delayed the preparation of the charter and hit the economy supported by Western aid, tourism and remittances from Nepalis working abroad.

Analysts said if political parties failed to forge a consensus the nascent Himalayan republic may slip into widespread chaos. The country is already struggling with power shortages and nearly double-digit inflation.

Reporting by Gopal Sharma; Editing by Manoj Kumar and Andrew Heavens

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