KATHMANDU, July 22 (Xinhua) -- The world's youngest republic Nepal faces a political uncertainty after the largest party in the Constituent Assembly (CA), the Communist Party of Nepal (Maoist) (CPN-M) decided not to form the new government Tuesday.

    The decision came after their presidential candidate Ram Raja Prasad Singh lost to Nepali Congress (NC) candidate Ram Baran Yadhav in the presidential run up elections on Monday.

Maoist Chairman Prachanda speaks with the media during a news conference in Kathmandu July 22, 2008. Nepal's Maoists have decided not to form a new government to protest against a decision by lawmakers to reject their candidate for the ceremonial post of the presidency. (Xinhua/Reuters Photo) Photo Gallery>>>

    "After the defeat in the presidential election, our moral base to make the new government has totally come up to the end. So we have decided to stay in opposition," the chairman of the CPN-M Prachanda said at a press conference in the Nepali capital of Kathmandu.

    The CPN-M, which bagged 227 seats in the CA, has regarded the new alliance formed between the Nepali Congress, the Communist Party of Nepal (Unified Marxist-Lennist) (CPN-UML) and the Madhesi People's Rights Forum (MPRF) during the presidential election as "unholy and unneutral."

Ram Baran Yadav, the elected first Nepali president, greets his supporters, in Kathmandu, Nepal, July 21, 2008. Ram Baran Yadav from Nepali Congress (NC) was elected the first Nepali president, the Constituent Assembly (CA) speaker declared on Monday afternoon. (Xinhua Photo) Photo Gallery>>>

    The newly elected president Ram Baran Yadav was expected to invite the CPN-M to form the new government soon after taking office after a swearing-in ceremony on Wednesday.

    "Our all efforts to make a new government in the past three and half months have been over. Now in accordance to the new equation we gladly accept the place of opposition in Nepali politics," Prachanda said, requesting the new president to call on the new alliance to make the new government.

    "We will determine our support or oppose the new government on the basis of their qualities or misdemeanor," he added.

    The CPN-M leader also threatened that there was "a great danger of the anti-revolution to make Nepal a failed state."

    "There is a big reactionary conspiracy of foreign powers after we won the faith and belief of large crowd of people. Nepal's politics has clearly signified a great danger of anti-revolution," Prachanda said, appealing the people to be united against the conspiracies of foreign powers whom he didn't want to name.

    He also criticized the new government for stopping the allowance to the CPN-M armed force sitting inside the monitored cantonments and warned that if the present situation continues, patience and tolerance will soon run out.

    However, the CPN-M chairman recalled that his party was fully committed to the ongoing peace process and ready to implement the accords done with the previous government.

    The CPN-M fought the decade long battle that claimed the life of around 13,000 people before signing the peace deal with the government in November, 2006.

    However, one of the leaders of the new alliance has said they are ready to work with the CPN-M to form the new government.

    "In the new political scenario we are ready to talk with the CPN-M about going together in future," the CPN-UML leader Bhim Rawal told Xinhua on Tuesday, adding that there was no option to make a national unity government in the transition.

    "We have not made any agreements in the alliance about the new government. We will talk with the CPN-M to reach a consensus," he added.

    The new political turmoil has created uncertainty for the future of the Himalayan republic.

    "It's a very critical moment as Nepal has walked away from the politics of consensus to the politics of numbers. This might create obstacles to the ongoing peace process," journalist and Nepali Times columnist Prashant Jha told Xinhua reporter.

    "It will be hard for a government without the CPN-M. There will be no stability, lack of governance and constitution writing will be difficult if the CPN-M stays in opposition," he added.