Nepal's Maoist prime minister has resigned, following a confrontation with the president over a controversial decision to fire the army chief. The resignation plunges the country into political uncertainty and is a setback to a peace deal that brought the Maoists into the political mainstream.
Prime Minister Prachanda announced his resignation in a nationwide address hours after President Ram Baran Yadav overturned an order by his Maoist-led government sacking the army chief.
The Maoists had accused the army chief of defying government orders not to hire new recruits, and reinstating eight generals the Defense Ministry had dismissed.
The president, who belongs to an opposition party, said the Maoist decision was "illegal and unconstitutional."
Mr. Prachanda called the president's move an attack on Nepal's infant democracy and the peace process. He said the president had no right to act as a parallel power. He said he is stepping down for the protection of democracy.
Prime Minister Prachanda, who is also known as Pushpa Kamal Dahal, resigned after two parties in the coalition withdrew support to protest the firing of the army chief, leaving the Maoists with a thin majority.
Nepali Times Editor Kunda Dixit says the Maoist decision had met with strong opposition from virtually all political parties.
"The Maoists are politically isolated," said Dixit. "All the other parties have now said that they were wrong. Their argument is that the Maoists bypassed the president, who is actually the ceremonial commander of the army, and they are using the threat of mob violence in order to get away with it."
The standoff between the Maoists and the army chief stems from his refusal to integrate former rebel fighters into the army as stipulated by the peace deal. The army chief says the fighters cannot join the military because they are politically indoctrinated.
Demonstrations were held in the capital, Kathmandu, by supporters of both the Maoists and the opposition. There are fears street protests by supporters of the former rebels will intensify following the Prime Minister's resignation.
Prachanda led a decade-long insurgency before he renounced violence and embraced multi-party democracy under a 2006 peace deal.
The former rebels went on to win the most seats in elections held last year, bringing Prachanda to the helm of the government. But in the past year, the Maoists have been criticized for muzzling the press and using violence to intimidate opponents.
The latest crisis could imperil the 2006 peace deal. As part of the deal, Nepal's monarchy was abolished, and a new constitution is being framed for the country.