Kathmandu: Nepal's main opposition NC obstructed the proceedings of Parliament for the third consecutive day on Wednesday, demanding the resignation of Premier Jhalanath Khanal, who is also facing pressure from key ally UCPN-Maoist for the reshuffle of the Cabinet.

Nepali Congress (NC) leaders said that Khanal, while signing a 5-point deal on May 28 for extending the term of the Constituent Assembly for three months, had agreed to resign after acknowledging that his government had "failed" to make progress in the peace process and Constitution-writing.

The Prime Minister must resign and pave the way for formation of a national consensus government as per the 5-point deal, senior NC leader Ram Sharan Mahat said.

As per the deal, the peace process should be expedited and Constitution-drafting completed by the end of August, he said.

"We will not allow functioning of the Parliament proceedings unless the Prime Minister assures implementation of the 5-point agreement," Mahat said.

Separately, Khanal's ally and Maoist chief Prachanda handed him a new list of candidates to replace the incumbent ministers with them. Maoists have threatened that they would withdraw from the government if their demands are not met.

However, the Prime Minister is neither in the mood to resign, nor reshuffle the Cabinet, said a source close to Khanal.

Environment Minister Sunil Manandhar also said that the Prime Minister does not intend to resign. He, however, said a Cabinet meeting would be held shortly to decide the key issues.