Nepal's King Gyanendra on Friday restored democracy in the Himalayan kingdom.

In a televised address to the nation, the king asked the Seven Party Alliance to suggest a prime ministerial candidate. It may be noted that King Gyanendra was unwilling to consider this option just a week back.

Gyanendra: Last Hindu Monarch?

The beleagured monarch said power was being returned to the people and he would like elections to be held as soon as possible.

Pending the completion of the election process, Gyanendra invited the seven-party alliance, which has been spearheading a movement against his rule, to recommend a name for the post of prime minister. Until a new government is formed, the present council of ministers would continue, he said.

India's Nepal Dilemma

The new government is expected to hold negotiations with the Maoists, who are leading an often violent 'people's revolution' in the countryside. Sources said the SPA and the Maoists had agreed on a 12-point deal on this issue

The King's announcement will be the new beginning in the democratic process of Nepal. It's believed that it will also be the end of King's absolute power and will change the contours of the monarchy forever.

G P Koirala, former prime minister of Nepal, has already said that Maoists will accept such move for restoration of democracy.

Thousands of people who have gathered to demand democracy in Kathmandu are likely to celebrate the King's retreat in a big way in form of a euphoric 'Vijay Yatra'.

The announcement by a grim-faced monarch, in a 10-minute address to the nation on the state-run Nepal Television, came a day after Prime Minister Manmohan Singh's [Images] special envoy Karan Singh bluntly told him to restore multi-party democracy and hold a dialogue with political parties.

The King said he was returning the executive power to the people according to Article 35 of the Constitution.

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With PTI inputs