Ex-rebels withdraw plans to form govt

Nepal's former rebels yesterday withdrew plans to form the country's new government - pushing the Himalayan nation into fresh political turmoil.

The ex-rebels, formally known as the Communist Party of Nepal (Maoist), said they could not lead a new government after their candidate for president was defeated on Monday.

"After our candidate was defeated in the president election we have lost the moral grounds to lead the new government," Maoist leader Prachanda told reporters.