JOIN USThe Nepali Congress, the largest party in the ruling alliance and the only one to be contesting the prime ministerial election, agreed to pull out its candidate Ram Chandra Poudel after it became clear he would lose with both the communists and Maoists voting against him.
Nepal's unique election laws say the prime ministerial poll, which is held among lawmakers, can continue endlessly - even if there is just one contestant - unless he manages to muster simple majority in the 601-seat house or withdraws.
Poudel's rivals - Maoist supremo Pushpa Kamal Dahal Prachanda and communist chief Jhalanath Khanal - were forced to exit from the race, the first due to a vote-buying scandal and the latter due to opposition by his own party men.
Both the Maoists and communists then began urging Poudel to abandon the fruitless contest so that a new election with fresh candidates could be started.
On Wednesday, both threatened to vote against Poudel if he did not step down. Had they done that, Poudel's candidature would have been scrapped since it would have meant the majority was against him.
The Nepali Congress decided to avert the defeat and quit the race after a mammoth five-hour meeting with other parties.
With India sending Foreign Secretary Nirupama Rao to Nepal for consultations with the parties and government Jan 18, it remains to be seen if Nepal will be able to put up a new government before that.
Also, from Jan 15, the UN will withdraw from Nepal's peace process, leaving the fate of nearly 20,000 Maoist guerrilla fighters and their over 4,000 firearms uncertain.
Though the government had formed a special committee to take over the UN's supervisory work, its authority has become uncertain following the Maoists' refusal to hand over their arms to the panel.