Jhalanath Khanal elected new Nepal PM

Nepal Communist Party President Jhalanath Khanal has been elected the prime minister of the country, ending the seven-month deadlock over the formation of a new government after Maoist supremo Prachanda quit the race in his favour in a last minute deal.

60-year-old Khanal, leader of the Communist Party of Nepal (United Marxist-Leninist), secured 368 of the 557 votes cast in the 601-member Parliament, the speaker announced.

Khanal's party, which is the third largest party in the parliament and leads the caretaker coalition, got support from the main Opposition Maoist Party.

Earlier, in a surprise move, CPN-Maoist withdrew Prachanda from the Prime Ministerial race and decided to support Khanal.

Nepal's parliament voted for a new prime minister under revised election rules designed to break a deadlock that had left the country without a government since the June 30 resignation of Prime Minister Madhav Kumar Nepal under intense Maoists pressure.

Under the new rules, no lawmaker was to be allowed to abstain from voting in the House.

The UCPN-Maoist has 238 seats and the CPN-UML has 108 seats in the Constituent Assembly, which acts as the country's interim Parliament.

The second largest Nepali Congress, which put up R.C Poudyal as its candidate again, received 122 votes. The party has 114 members in the House.

Bijaya Gachhadar, the president of Madhesi Peoples Rights Forum -Democratic, who was the third candidate got 67 votes.

President Ram Baran Yadav had last week directed Parliament to begin a fresh process for the election of Prime Minister on the basis of majority vote as political parties had failed to hammer out a deal to form a consensus government.

Earlier Poudyal had failed to garner a majority in 16 rounds of voting, forcing him to quit the race.

The political crisis has been hugely damaging for Nepal, which is still reeling from its decade of civil war that ended in 2006.

The standoff has delayed the drafting of a new constitution and conclusion of the peace process.

Before the election, Khanal told Parliament that it was crucial for leaders to consolidate the gains made in the peace process and take it to its logical conclusion.

"We must move ahead very quickly or once again be plunged into crisis," he said.

"Parliament's main task is to draft the new national constitution and I can assure you that we will achieve that under my party's leadership of the next government," he told the lawmakers.

The election for a new prime minister today came under revised election rules designed to break a deadlock that has left the country without a government for seven months.

The new rules barred lawmakers from abstain from voting in the House.

In a landmark verdict, Nepal's Supreme Court in December had ruled that lawmakers in Parliament cannot choose to remain neutral or desist from casting their votes in the run-off poll.

After the court's directive, the Speaker had ruled that no lawmaker can remain neutral or choose to abstain in the election.

In a series of run-off polls since June 30, the main opposition UCPN (Maoist) and CPN (UML) lawmakers had chosen not to vote for a prime minister while Madhesi parties opted to stay neutral.

Premier Nepal is running a caretaker government since he stood down under intense Maoists' pressure.

The Maoists, who fought a 10-year battle against the state before entering politics and winning elections in 2008, had pushed for leading a new coalition. But they an did not have absolute majority, and had been unable to win the support of smaller parties that they would need to form a coalition government.

The political crisis has been hugely damaging for Nepal, which is still reeling from its decade long civil war, in which at least 13,000 people died.