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Nepal's Government Scraps Annual Payments to Royal Family

Nepal's interim government has unveiled a new budget which cuts off the royal family's annual allowance.

The $2.6 billion budget, presented to Parliament Thursday, scraps all state payments to embattled King Gyanendra and his family. Parliament must approve the plan for it to take effect.

Last year, the government gave the royals about $3 million.

The budget is the latest in a series of blows to the Nepalese monarch. In January, the country's Maoist-led government wrote an interim constitution, stripping the king of all powers.

King Gyanendra had fired the government and assumed absolute power in February of 2005. In April 2006, pro-democracy protests forced him to give up his authoritarian rule.

Former Maoist rebels and mainstream parties joined to form a government early this year. The groups signed a peace deal last year, ending a decade-long insurgency that claimed 14,000 lives.

Nepal will elect a special assembly in November to write a new constitution. Nepal's Maoists demanded the election in exchange for the truce. The special assembly will decide the fate of the monarchy, which Maoists want eliminated.

The proposed budget allots $54 million for the November elections. It also nationalizes royal property.