A key ally of Nepal's ruling Maoists withdrew support on Sunday, leaving the coalition unstable after differences over the sacking of the country's army chief earlier in the day.
"The party has decided to leave the coalition and withdraw support to the Maoists," Ishwar Pokharel, general secretary of the Communist UML party, told reporters.
The Maoists' move to sack army chief Rookmangud Katawal has angered government allies. The UML's withdrawal of support leaves the Maoists with a slender majority in a 601-member parliament.
"The cabinet has decided to remove the army chief since he could not provide a satisfactory explanation to the three charges levied by the government," Maoist Information and Communications Minister Krishna Bahadur Mahara, who is also the spokesman of the government, said after the cabinet meeting Sunday.
Katawal had been asked to explain why he had continued military recruitment despite the government's halt order and reinstated eight brigadier-generals who had been retired by the defence ministry. He was also rapped over the army pulling out of the National Games when the Maoist combatants too decided to take part.
The four allies of the government - the Communist Party of Nepal-Unified Marxist Leninist (UML), Madhesi Janadhikar Forum (MJF), Sadbhavana Party and Communist Party of Nepal (United) - however distanced themselves from the sacking, saying they had asked the Maoists not to take a hasty decision.
Fearing their desertion, Maoists began wooing the fringe parties to prop up their government.
However, the main parliamentary parties rallied under the main opposition party, the Nepali Congress of former prime minister Girija Prasad Koirala, to oppose the dismissal and urge President Ram Baran Yadav, who is the constitutional head of the government, to reject the cabinet order.
Yadav, who had in the past asked the Maoists to act consensually with the other parties, was reported to have termed the cabinet decision "unconstitutional".
"The constitution says that all decisions regarding the army have to be made on the basis of consensus," said legal journalist and author Ananta Luitel. "Since there was no consensus, the president can either ask the Supreme Court for advice or send the cabinet order to the interim parliament for its decision."
If the president sends the dismissal order to parliament, it would be put to vote and the Maoists are likely to be defeated.
Though the Maoists have been threatening to remove the president if he opposes the army chief's dismissal, Luitel said that would be impossible legally.
"The president can be removed only if he is impeached by two-thirds of the parliament members," he said. "The Maoists can't sack him on their own."
Meanwhile, former army generals said Katawal was likely to challenge his removal in court.
While the leaders planned strategies, violence erupted on Kathmandu's main thoroughfares as thousands of Maoist cadres, celebrating Katawal's dismissal, clashed with NC supporters, who began condemning the "Maoist authoritarianism".
India could once again play a critical role in the new crisis.
In 2006, it was India that helped the Maoists return to mainstream politics after a 10-year armed insurgency. However, the hardliners in the Maoist party have been growing increasingly hostile to India and accusing the neighbour of intervention.
Though New Delhi had sent its ambassador to Nepal Rakesh Sood to meet Prachanda several times, asking him not to take any unilateral step about the beleaguered army chief, the advice was rejected by the Maoist hawks.
Now with the Maoist government in danger of collapsing, India could once again have a major role in making or breaking the coalition. (With IANS, Reuters input)