In a letter sent to the parliament, the President asked the parties to begin the process of electing a new Prime Minister on a majority basis in accordance with the Constitution.
The call by the President to form a majority government was issued after the deadline given to the parties to form a consensus government expired yesterday without any outcome.
Bidya Devi Bhandari had on July 25 called on all the political parties to elect a new Prime Minister within a week based on consensus to end the political instability in the country, a day after premier KP Oli resigned.
It is learnt that the Parliament has started preparation for beginning the procedure of electing the Premier on Wednesday.
CPN-Maoist president Pushpa Kamal Dahal 'Prachanda' is expected to become Nepal's 39th Prime Minister with the support of largest party Nepali Congress, the Madhesis and other fringe parties if there is no dramatic development.
Mr Oli resigned last month ahead of a no-confidence vote, plunging the country into a fresh political turmoil after last year's crippling Madhesi protests against the new Constitution.
Mr Oli, who became prime minister last October heading Nepal's eighth government in the past 10 years, was facing a no-trust motion after the Maoists withdrew support from the coalition government.
Nepal's Maoist party led by Prachanda last week decided to initiate discussions and dialogue with all political parties, including the Madhesis, having representation in the parliament to form a national consensus government.
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