Kathmandu:  All of Nepal's Cabinet Ministers have resigned to allow the Prime Minister to set up a broad-based government including main opposition parties, a spokesman said on Friday, which should help finalise the introduction of a new Constitution.

The Himalayan country wedged between giants China and India has been plagued by instability for years even though a Maoist insurgency ended in 2006 and the monarchy was abolished, as the rebels had demanded, two years later.

The mass resignation at midnight on Thursday came after Prime Minister Baburam Bhattarai, a former rebel leader, struck a deal with opposition parties to end turmoil that has hurt the economy and delayed the introduction of the Constitution.

"Bhattarai will now take the initiatives to form a national consensus government with other political parties," the Prime Minister's spokesman, Ram Rijan Yadav, said.

Opposition parties have been pressing for a consensus government before they agree on the new constitution, which is hoped will promote stability.

"It will take a couple of days for the new government to be in place," Yadav said.

Bhattarai was elected Prime Minister in August last year with the support of smaller political parties.


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