Nepal assembly deadline extended by one year

Prime Minister Madhav Kumar Nepal arrives at the Constituent Assembly hall in Kathmandu May 28, 2010.

KATHMANDU (Reuters) - Nepal's parliament gave one more year on Friday to a special assembly tasked with drafting a new constitution, reinforcing hopes for an acceleration of a stalled peace process after a decade-long civil war.

The Constituent Assembly was elected in 2008 to prepare a new constitution, a key demand of the Maoist former rebels who ended their civil war under a 2006 peace deal. Its term had been due to expire at mid-night local time on Friday.

But the assembly failed to prepare a new draft by the deadline because of squabbles and deep mistrust between the Maoists and the main political parties.

In a last-minute move, Maoists agreed to back the government-proposed extension for the assembly after ruling parties agreed to meet their demand for the resignation of Prime Minister Madhav Kumar Nepal.

Deputies voted 580 to five in favour of extending the term of the assembly, giving delegates enough time to write the Himalayan republic's first constitution, officials said.

"The prime minister will clear the way for the formation of a government of national consensus soon," Arjun Narsingh K.C., a senior official of the Nepali Congress, the biggest party in the ruling front, told reporters.

Nepal is currently governed under an interim constitution.

Nepal abolished its 239-year-old monarchy and turned into a republic two years ago. The Maoists, who control 40 percent members in the 601-seat assembly, want to head a national unity government to oversee preparations for the new constitution.

Instability in Nepal could have regional implications as neighbouring China and India compete for influence over the mountainous nation rich in hydro-electric resources.

Popular anger is growing over the failure of the political parties to meet the deadline.

"They have remained busy hankering for power and forgotten the main task," said Seema Shrestha, owner of a grocery shop in Kathmandu. "Leaders should apologise before the people for their failure and promise not to repeat it."

(Editing by Bappa Majumdar and Maria Golovnina)