King Gyanendra (file photo)

Nepal's King Gyanendra has lifted the state of emergency he imposed three months ago when he fired the government and assumed absolute power. But it is not yet clear if civil liberties have been restored.

A proclamation lifting the emergency was issued early Saturday, two days before the emergency was due to expire. The notice came only hours after King Gyanendra returned from a trip to China, Indonesia and Singapore, where government leaders advised him to restore democracy to his mountain kingdom.

The proclamation did not say whether the King is giving up the extraordinary powers he assumed when he suspended civil liberties, imposed strict censorship and banned political protests on February 1.

A specialist on Nepal in New Delhi, S.D. Muni, says the King's move in lifting emergency rule is positive, but so far he retains his grip on the administration.

"It is still uncertain whether the King is going back to a multiparty democracy…It remains to be seen what kind of a government he puts in place," he said.

The political opposition has welcomed the end of emergency, but also remains skeptical about whether the King will restore full democratic rights.

Critics of the monarch's actions have called on him to disband a powerful anti-graft commission, which they say he established primarily to give him a tool to use against politicians.

Nepal's former PM Sher Bahadur Deuba speaks during a press conference a day after his release from house arrest

Former Prime Minister Sher Bahadur Deuba, a critic of the emergency decree, was arrested by the commission on corruption charges earlier this week.

Yavraj Ghimre, editor of Samay magazine in Kathmandu, says an official announcement that the commission will continue to function has raised fears that the King is not about to give up dictatorial powers.

"This royal commission on corruption which was appointed with promulgation of emergency continues to function with sweeping powers and arbitrary powers," he said. " It does have the power to investigate, to prosecute and pronounce judicial verdict, something you cannot think of in democracy."

The King says he assumed direct powers because the government had failed to quell a raging Maoist rebellion, and to hold elections. He also accuses Nepal's political parties of widespread corruption.