UPDATE 4-Nepal Maoists quit govt, vow to disrupt elections

(Adds new analyst comments)

By Gopal Sharma

KATHMANDU, Sept 18 (Reuters) - Nepal's Maoist former rebels quit the interim government on Tuesday and vowed to disrupt preparations for historic elections in November unless the Himalayan nation's monarchy was abolished immediately.

The move is a major setback to last year's peace deal in which the rebels ended a decade-old insurgency and agreed on elections for a special assembly to decide the fate of the monarchy.

"We will not accept the code of conduct announced by the election commission and we will disrupt all ongoing election plans," Maoist deputy leader Baburam Bhattarai told a rally in Kathmandu.

Bhattarai, speaking hours after the Maoists quit the government after failed talks with Prime Minister Girija Prasad Koirala and major political parties, also warned the former rebels could take up arms again if their demands were ignored.

"We will launch peaceful protests, but we have the right to counter those who try to suppress our peaceful programme," he told thousands of cheering supporters beneath a large poster of Maoist leader Prachanda.

The Maoists have been insisting the nation must be declared a republic ahead of the Nov. 22 vote, saying King Gyanendra and his supporters were trying to sabotage the election.

While Bhattarai stopped short of announcing a boycott of the polls, some analysts said they were now likely to be delayed.