KATHMANDU (Reuters) - Nepal's warring political parties failed to meet a midnight deadline to agree on a new constitution on Sunday, plunging the Himalayan republic into further uncertainty, but the government moved quickly to defuse the crisis with a call for elections.
A new constitution was widely seen as crucial to ending the instability that has plagued Nepal since the end of a Maoist-led civil war in 2006 and subsequent overthrow of the monarchy, but it has been thwarted by demands for the country to be divided into states along ethnic lines.
The debate has sparked violent protests in recent weeks and ethnic groups have staged demonstrations near the parliament building where a Constituent Assembly of politicians had until Sunday night to end its haggling and agree on the charter.
Barsha Man Pun, a Maoist minister told reporters after an emergency cabinet meeting that the government had decided to hold another round of elections for the assembly - which has doubled as a parliament - on November 22.
"We had no other alternative," he told reporters. "We apologise for not being able to prepare the constitution."
Earlier, several partners in the ruling coalition stormed out of the cabinet meeting, decrying the Maoist's "unilateral" decision to set the country on course for fresh elections.
"The election will only add to the turmoil because the government did not take major political parties and all of its coalition partners into confidence," said Kapil Kafle, editor of the Nepal Samacharpatra daily.
More than a dozen people were injured after protesters tried to break a security cordon outside the parliament in Kathmandu, prompting police to baton charge the demonstrators and fire teargas, police spokesman Binod Singh said.
Prolonged instability in Nepal, which sits on the source of rivers that supply water to millions in South Asia, could suck neighbours China and India into competition for influence there. Both are important donors and trade partners for Nepal, a poverty-stricken country dependent on aid and tourism.
Diplomats say that because of its political uncertainty Nepal has failed to exploit the export potential presented by the rapid growth of its giant neighbours, and investors have avoided the country. The economy grew by 3.5 percent last year, its lowest rate in four years.
The new constitution was to have been a key part of the peace deal struck with the Maoists to end their revolt.
However, the assembly missed several deadlines for the charter because of deep divisions over the number, boundaries and names of the nation's states.
The assembly is dominated by the Maoists, who waged their revolt on a pledge to empower the country's many ethnic groups after centuries of exclusion and discrimination.
The Maoists want the creation of up to 14 states named after ethnic groups, and are backed by several small Madhesi parties demanding an autonomous state in the country's southern plains.
"The demands for ethnic autonomy have become so strong that if they are not addressed they could lay the seeds for further conflict as happed in Sri Lanka and Aceh," said Kunda Dixit, editor of the Nepali Times weekly.
(Reporting by Gopal Sharma; Editing by John Chalmers)