Considered as right-wing in Nepal politics, the party supports the agenda of again declaring Nepal as a Hindu state and re-establishing the deposed monarchy.
The surge of the RPP-N in the November polls was seen as a threat to traditional political parties like Nepali Congress (NC), Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) and Unified Communist Party of Nepal-Maoist (UCPN-M).
The party split after serious differences surfaced over the nomination of the candidates under the proportional representation (PR) system where half of the party's central working committee members accused party chairman Kamal Thapa of nepotism and favouritism while selecting the PR nominees.
Thapa had unilaterally picked 24 PR candidates without consulting the party's central working committee and forwarded their names to the Election Commission for approval some 15 days back.
After that, Thapa went on a visit to India for several days creating more tension back home.
Former minister and party central working committee member Tanka Dhakal is leading the breakaway faction and got registered the new party, named Nepali Rastriya Prajatantra Party, with the Election Commission Monday itself.
Dhakal took along 20 out of the party's 42 central working committee members to register the party.
Party supports the agenda of again declaring Nepal as a Hindu state.
"Christians, who do not want to see our rise in national politics, are behind the party split," RPP-N general secretary Chandra Bahadur Gurung said after an emergency party meeting.
It was a ploy to weaken the agenda of "monarch with democracy" and "Hindu state", Gurung said adding that those involved in the party split would be sacked.
Monday is the last day for submission of names of candidates under the PR system to the Election Commission by the political parties in this Himalayan nation.
Not only RRP-N, serious differences have surfaced in other political parties too regarding the selection of PR candidates with candidates accused of horse trading and promoting nepotism.
Within certain benchmarks, parties have to select PR candidates from various under-represented sections of the society.
All eligible parties, which have garnered a stipulated number of votes in the first-past-the-post elections system, have to nominate their candidates under various categories representing minorities like women, dalits, tribes, minorities, Muslims and others in PR category.
Of the country's 601-member Constituent Assembly, 240 members are elected through the first-past-the-post system, while 335 are elected by through the PR electoral system.
The RPP-N won 24 seats under the PR category with half of the party's central working committee members expressing dismay over the selection of the candidates before the first sitting of the assembly.