- Associated Press - Wednesday, June 30, 2010

KATMANDU, Nepal (AP) — Nepal‘s prime minister announced his resignation Wednesday, bowing to pressure from opposition Maoists who have been demanding his ouster in parliament and in street protests.

Prime Minister Madhav Kumar Nepal said in a televised speech that he decided to resign to end a political deadlock and shore up the peace process that ended years of Maoist insurgency in the Himalayan nation.

The Maoists, the former communist rebels who won the most seats in 2008 elections, have been protesting for months demanding his resignation and a new national government headed by them.

“I had frequently urged the political parties including the Maoists to find an appropriate way out of the present deadlock and forge a consensus,” Mr. Nepal said. “But no agreement has been reached so far. As it would be inappropriate to further prolong the situation of confusion and indecision, I decided to resign from the post of prime minister to help accomplish the tasks of constitution drafting and the peace process.”

Mr. Nepal met President Rambaran Yadav immediately after the speech and presented his official resignation letter, the president’s office said.

The Maoists welcomed the announcement.

“The prime minister should have resigned a lot earlier,” Maoist spokesman Dinanath Sharma said. “However, we welcome the resignation.”

Mr. Sharma added that the party has called a meeting of its top leaders on Thursday to decide its next move.

The prime minister took over the post in May 2009 after the previous government led by the Maoists resigned following differences with the president over the firing of the army chief.

The prime minister had the support of 22 political parties in parliament and more than half of the 601 members in the assembly. However the Maoists, who have the largest number of seats in the assembly, refused to support his government and instead staged protests demanding the disbanding of the government.

In May, the Maoists called a general strike which shut down the nation for more than a week. The protests also delayed the writing of a new constitution, which was supposed to be completed by May 2010. The deadline was extended by a year.

It is not clear who will succeed the prime minister, but the main political parties are likely to hold negotiations to form a government that includes most parties in parliament.

The Maoists ended their decade-old rebellion in 2006 and joined a peace process. Since then they have confined their fighters to U.N.-monitored camps and joined mainstream politics.