Maoist chairman Prachanda, whose CPN-Maoist party is all set to head Nepal's next government, has expressed willingness to work with Prime Minister Girija Prasad Koirala in the near future.

Prachanda, whose real name is Pushapa Kamal Dhahal, met Koirala at his residence at Baluwatar on Sunday and discussed the post election political situation in the country besides exchanging New Year's greetings, sources close to the PM said.

54-year-old Prachanda, whose party continues to head towards victory, sought Koirala's cooperation to move ahead.

The former rebel leader has been saying that he would keep the seven-party alliance intact and is ready to work with other parties toward forming a coalition government.

The Prime Minister congratulated Prachanda for becoming victorious in the election and the Maoist chief also thanked Koirala for conducting Constituent Assembly polls in a free and fair manner.

The two also discussed the future strategies and ways to forming a new government that would draft the new constitution.

Meanwhile, CPN-UML, a major coalition partner of the alliance has said it will step out of the government immediately.

"It will be inappropriate to stay in the government against the people's mandate," CPN-UML leader K P Oli said.

UML general secretary Madhav Kumar Nepal has resigned from the party's top post, taking the moral responsibility of the defeat in the polls.