Caught between an implacable opposition and a feckless ally, Nepal's Prime Minister Jhala Nath Khanal began to make last-ditch attempts to save his floundering government on Saturday as the deadline dawned for his resignation.

The wily communist leader, who had this week pledged in parliament that he would quit by Saturday, now faces the possibility of having to keep his word as his allies, the Maoists, have refused to bail him out. Khanal, whose six-month-old government failed to give impetus to the flagging peace process and the drafting of a new constitution, had publicly announced he would step down in the hope it would pressure the Maoists into making concessions.

Five years after the Maoists signed a peace accord to end their decade-old armed insurrection, their guerrilla Army still remains intact. Nepal's main political parties as well as the international community have been demanding that the People's Liberation Army (PLA) be demobilised before the promulgation of the new constitution. The Prime Minister had proposed to the Maoist leadership that of the nearly 20,000 PLA combatants, about 7,000 be inducted into the Nepal Army, enjoying no higher rank than colonel. He has also proposed that the remaining combatants be paid a compensation of NRS 700,000 each and be discharged.

Had the Maoists agreed to the proposal, it would have helped the Prime Minister wriggle out of his pledge to quit, on the ground that his government had seen progress in the peace process. Khanal was hoping Maoist chief Pushpa Kamal Dahal Prachanda would agree to his proposal since his government has made major concessions to the former guerrillas about cabinet appointments. However, his hope received a blow on Friday when the Maoist leadership met to discuss his proposal on the PLA and rejected it outright.

"We don't see any need to agree with the plan tabled by the Prime Minister," Maoist leader C.P. Gajurel told the media after the meeting. "Also, being the largest party in Parliament, the Maoists should lead the government." Though a tense Khanal called a meeting with the Maoists and the main opposition party, the Nepali Congress, Saturday, it had not started yet with the opposition insisting that the Terai parties, the fourth largest bloc in parliament, be also made part of the talks. "Since the PM has said he would resign if the peace progress did not progress by Saturday, he would step down," said Energy Minister Gokarna Bista, who is a member of Khanal's Communist Party of Nepal-Unified Marxist Leninist.

"However, we are apprehensive that even if he resigns to pave the way for a national government, it might not materialise. Instead, there could be once again a majority government, which would lead to the same political turmoil." Nepal seems poised for further turbulence with no clear leadership emerging to head the next government and both the Maoists and Nepali Congress staking claim. If he fails to win over the Maoists, Khanal, the fourth prime minister in as many years, can survive till Monday when parliament convenes and he is bound to be under fire for failing to honour his commitment. Meanwhile, only 18 days are left now for the promulgation of a new constitution.

However, it is certain that the government will fail to do so by Aug 31, even though the deadline was extended twice. A huge question mark hangs over the validity of parliament and the government after that especially as Nepal's Supreme Court this year ruled that the state can't prolong the deadline eternally.