The Nepali Congress (NC), the largest party in the coalition government, made the pre-emptive move Monday after Prime Minister Madhav Kumar Nepal's Communist Party of Nepal-Unified Marxist Leninist said it would vote against NC candidate Ram Chandra Poudel Wednesday.
The deepening feud among the major parties has resulted in the republic remaining without a prime minister even six months after Nepal resigned due to Maoist pressure.
Though 16 rounds of election were held in parliament to choose a new premier, they became futile as the communists and the Maoists - two of the three largest parties - abstained from voting.
However, after Supreme Court last month said MPs would not be allowed to stay neutral during the vote, there was hope that the 17th round of vote Wednesday would see some change.
Though Poudel was not likely to get simple majority in the 601-seat house and win the election, his party had pledged to scrap his nomination if half the lawmakers voted against him and pave the way for a new election with other candidates.
With the Maoists and the communists both saying they would vote against Poudel Wednesday, the former deputy prime minister's exit from the race seemed certain.
However, Poudel's party hit back Monday. At a meeting with the communists, the NC said if the former voted against its candidate Wednesday, it would pull out of the ruling alliance immediately.
The ruling coalition already suffered a pullout last week with a regional party - the Terai Madhes Loktantrik Party - withdrawing support and its four ministers after two truant ministers quit the party to float a new outfit and yet were not sacked by the prime minister.