The Nepal government will nationalise the royal palace properties.

The government will put under a state trust the property assets belonging to the slain former King Birendra, Prime Minister G P Koirala has said.

Koirala also said he did not prefer a referendum to decide the future of monarchy in the Himalayan nation, as it would give chances to King Gyanendra, who ended his absolute rule early this year in the wake of a pro-democracy agitation, to play and influence the situation in his favour.

All property of late King Birendra would be put under a trust headed by the prime minister and all monarchial property, except the private assets of King Gyanendra, will come under the ownership of the state, Koirala told reporters at his home town Biratnagar.

Some private property should be left to the present king, he said, but added that the palace and jungle do not belong to the monarch.

Archeologically important assets would remain under the ownership of the Department of Archeology, Koirala said.

The procedure to settle the issue monarchy would be decided during the next round of peace talks with Maoists, he was quoted as saying by state-run The Rising Nepal daily.

Maoists have agreed to settle the issue of monarchy through the Constituent Assembly elections but CPN- UML general secretary Madhav Kumar Nepal favoured to hold referendum to decide the fate of monarchy, Koirala said.

Noting that a referendum would give chances to the king to play" and also influence situation in his favour, Koirala said deciding the fate of monarchy through the constituent assembly would be the less disputed solution.