Nepal's PM steps aside, Maoists to lead new republic

KATHMANDU (AFP) — Nepal's veteran prime minister announced his resignation Thursday in a move that paves the way for a new Maoist-led government following the abolition of the monarchy.

The announcement by centrist politician Girija Prasad Koirala, who is 83 and in failing health, resolves a political stalemate over powersharing that followed the declaration of a republic on May 28.

The Maoists have positioned their leader, Prachanda, to replace him as leader of the landlocked Himalayan nation and one of the world's poorest countries.

The prime minister, whose Nepali Congress party was soundly defeated by the Maoists in the polls for the 601-member assembly, called on the CPN Maoists to form the next government.

"I declare I have given up the prime minister's post through this assembly today," Koirala told the recently elected constitutional assembly.

"With me or without me, we all need to maintain the culture of consensus," he said.

"I appeal to them (the Maoists) to garner consensus for the formation of a new government under their leadership," Koirala also said in a statement read out by Ram Chandra Poudel, Nepal's peace minister.

The Maoists and Congress -- Nepal's two main parties -- have been arguing for weeks over who will become the first president and prime minister of the world's youngest republic.

On Wednesday, they reached a deal that the president and prime minister will be elected through the assembly that will draft Nepal's new constitution.

"Now we all must focus on drafting a new constitution by giving up our petty political differences and ending confusion," Poudel said.

Prachanda and second-in-command Baburam Bhattarai joined hundreds of other assembly members showing their approval of Koirala's resignation by banging on the tables in the massive assembly hall.

Nepal's Maoists, who have 220 seats in the assembly, twice as many as Congress but just less than a majority, welcomed the veteran premier's resignation.

"We are glad he finally did it. We have been demanding his resignation as it had been a stumbling block for the leaders trying to reach consensus," Maoist spokesman Krishna Bahadur Mahara told AFP.

"The resignation is a step towards the formation of the government under our leadership," he said.