Nepal Maoists quit government in blow to peace deal

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KATHMANDU, Sept 18 (Reuters) Nepal's Maoist former rebels quit the interim government after they failed to reach a deal with the prime minister to abolish the Himalayan monarchy ahead of a national vote over the question.

The move is a setback to last year's peace deal in which the rebels ended a decade-old insurgency and agreed on elections for a special assembly to decide the fate of the monarchy.

''We have submitted our resignations to the prime minister,'' Maoist cabinet minister Dev Gurung told Reuters after talks with Prime Minister Girija Prasad Koirala and the other main political parties. ''Because the talks were not successful.'' The government's Peace and Reconstruction Minister Ram Chandra Poudel confirmed the Maoists had resigned.

The Maoists have been insisting the nation must be declared a republic ahead of the November 22 vote, saying King Gyanendra and his supporters were trying to sabotage the election.

Now they say they will launch street protests to ensure the election is held on time but will keep to the ceasefire.

The former guerrillas have called a rally in the hill-ringed capital later today when they are expected to announce their campaign.

Some analysts said the Maoists, who entered mainstream politics only last year, were nervous about how well they would do in the polls, and could be trying to distance themselves from the government.

There has also been speculation that the Maoists were seeking a pre-election deal with other parties to guarantee them some assembly seats uncontested.

Whatever the reason for their decision, the news appeared to complicate the peace process.

''The peace process will not be as smooth as it was before but it does not mean that Nepal will return to the same level of violence as witnessed during the insurgency,'' said Lok Raj Baral, chief of the Nepal Centre for Strategic Studies.

The new government has already stripped the monarch of almost all his powers, including his control over the army.

The Maoist conflict that began in 1996 killed around 13,000 people and hit the aid- and tourism-dependent economy of Nepal, one of the world's poorest nations.

REUTERS ARB VC1505

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