Prime Minister Madhav Kumar Nepal announced his resignation as Prime Minister of Nepal during a televised address to the nation on Wednesday.

Although the government had been standing firm on its stance of not resigning before a political settlement was reached, including ex-combatant integration and formation of a national unity government, sources revealed early Wednesday afternoon that the prime minister would address the nation at 6pm. It then became clear that Madhav Kumar Nepal would resign due to a continuing failure to resolve the political impasse, as well as the Maoist threat to disrupt presentation of the budget in parliament.

During his 20-minute address in the presence of the cabinet, Nepal insisted that his government continued to have the support of a majority of parliament, but had been unable to proceed with government and parliamentary business due to continued obstruction from the UCPN (Maoist). He berated the largest party in parliament for non-cooperation and active disruption throughout the 13-month period of his government's tenure. Nepal then went on to list his government's achievements, but expressed bitterness at having been unable to bring the peace process to a conclusion, wholly because of Maoist opposition.

At the end of his address, Nepal thanked his allies and the public for supporting his government, and hoped for the speedy formation of a new consensus government. He also expressed hope that the Maoists would help advance the peace process.

Nepal will now submit his resignation to the president, following which he is expected to lead a caretaker government until the formation of a national unity government. In submitting his resignation at this juncture, Nepal has succeeded in killing several birds with one stone. He has regained the moral high ground, as he had been accused of clinging to power by not only the Maoists and other parties, but also by politicians within the UML and sections of the public. He has also fulfilled his end of the latest bargaining chip advanced by the Maoists, who had demanded his resignation in exchange for their support in passing the budget in parliament. The ball is now definitely in the Maoists' court.

However, Nepal's resignation will not provide an easy solution. The struggle for succession will now intensify within all the parties, who have been unable to decide on a prime ministerial candidate. This will prolong the political impasse, meaning that Nepal has now made the transition from a lame duck prime minister to a caretaker prime minister.