Nepal will unveil a new interim government on Friday headed by current Prime Minister Girija Prasad Koirala after an agreement between major political parties that will see the former Maoist rebels bag five ministries.

The country's largest party, the Nepali Congress will retain key ministries such as home, defence and finance besides the post of prime minister, a highly placed source said.

The three major parties NC, CPN-UML and CPN-Maoist will each get six ministers and five ministries while the NC (Democratic) will get four ministers and three ministries.

The formation of the new government, which was expected on Friday, was delayed due to last-minute wrangling over the distribution of portfolios.

"We are very close to the formation of the new government inclusive of the Maoists and as decision is yet to be made on certain matters. The announcement of the new cabinet will be made only on Saturday," Nepali Congress (Democratic) general secretary Bimalendra Nidhi said after a meeting of top political leaders.

Leaders of major parties including Maoist chief Prachanda who met at Prime Minister Girija Prasad Koirala's residence almost finalised the portfolio distribution among the eight political parties and sorted out most of the differences, he said.

During the meeting the working procedures of the government, their code of conduct, common minimum programme and coordination among various ministries were mainly discussed, Nepali Congress central member Arjun Narsingh KC said.