Nepal’s Prime Minister Pushpa Kamal Dahal ‘Prachanda’ on Monday decided to form a new alliance with former premier KP Sharma Oli’s party after terminating its nearly 15-month partnership with the Nepali Congress due to differences between the top leadership.

The alliance between the Communist Party of Nepal (Maoist Centre) led by Prachanda and the Sher Bahadur Deuba-led Nepali Congress has been terminated as the growing differences between the two top leaders reached a climax, a CPN-Maoist Centre party leader said.

“As (the) Nepali Congress did not cooperate with the Prime Minister, we are forced to look for (a) new alliance,” Ganesh Shah, Secretary of the CPN-Maoist, told PTI.

Prachanda became the prime minister for the third term with the support of the Nepali Congress on December 25, 2022.

After breaking the alliance with the Nepali Congress —the largest party in the House of Representatives— Prachanda joined hands with the Communist Party of Nepal (Unified Marxist–Leninist), led by Oli, who was regarded as Prachanda’s top critic.

Last year, the CPN-UML withdrew its support to the Prachanda-led government following a rift over backing the main opposition party’s candidate for the presidential poll.

The new cabinet will be formed on Monday afternoon, and the size of the cabinet will be smaller, said Surendra Pandey, Vice-chairman of the CPN-UML.

The rift between the Maoist Centre and Nepali Congress grew after differences grew between Nepali Congress leader and Finance Minister Mahat and Prachanda over the issue of budget allocation to certain projects.

The rift grew as Nepali Congress President Deuba wanted the party’s senior leader and newly elected lawmaker Krishna Sitaula to be made the Chairman of the National Assembly against Prachanda’s plan to appoint his party’s fellow to the key post.

On Monday, the CPN-UML Chairman Oli met Prachanda at the Prime Minister’s quarters at Baluwatar and discussed matters relating to forming a new alliance, Shah said.

“The two leaders discussed the formation of a new government, a future course of action and possible leftist alliance among others, according to sources close to Baluwatar,” Shah said.

Soon after the meeting, leaders of three political parties, including Prime Minister Prachanda, CPN-UML chairman Oli and Rastriya Swatantra Party’s (RSP) Ravi Lamichhane met at Baluwatar and discussed the modality of the new alliance and the formation of the new government.

Nepali Congress emerged as the largest party in the House of Representatives during the November 2022 general election, securing 89 seats out of a total of 275.

The CPN-UML secured 78 seats, followed by the Maoist Centre, which got 32 seats.

The RSP, Rastriya Prajatantra Party, Janata Samajwadi Party and CPN-Unified Socialist won 20, 14, 12 and 10 seats respectively. It is necessary for a party to win the support of at least 138 members of the House of Representatives to form the government. CPN-UML, the second largest party in Parliament, will be a major alliance for the Prachanda-led new government.