Nepal's top court has upheld a declaration of Parliament to strip King Gyanendra of all his powers, dealing a major blow to the pro-monarchy supporters who hoped to halt the expected abolition of the 240-year-old institution by the first meeting of the constituent assembly.

A three-member Supreme Court bench of justices Anup Raj Sharma, Ram Prasad Shrestha and Gauri Dhakal upheld the two-year-old declaration of the House of Representatives to strip the king of all powers and bring the Nepal Army under the purview of the legislature.

The apex court also upheld the provision to declare Nepal a secular state. The bench quashed two separate petitions that had challenged the parliamentary declaration, The Himalayan Times daily reported.

Nepal's seven main parties, including the Maoists, teamed up in April 2006 and orchestrated weeks of protests and unrest that resulted in Gyanendra giving up dictatorial powers he had seized the year before.

After its revival following the 19-day movement, the House passed the declaration curbing the powers of the king and declared the supremacy of the parliament on May 18, 2006.

The declaration stripped the king of all the powers and overruled the then Constitution.

Stating that the interim Constitution of Nepal 2007 repealed the 1990 Constitution, the Supreme Court bench stated that there was no need to pass an order as demanded by the petitioners.

Advocates Achyut Prasad Kharel and Amita Shrestha had filed separate petitions challenging the House declaration. They had claimed that it was against the then Constitution.

The fiercely republican CPN-Maoist party has been demanding the immediate abolition of the monarchy since they ended their decade-long civil war after inking a peace deal in November 2006 with the government that took over from the king.

The Maoist leadership has said they have started consultations with various political parties and diplomatic missions about a 'graceful exit' for the king to end the centuries old Shah dynasty.

The recently held election for a 601-member special assembly is expected to abolish monarchy and rewrite Nepal's Constitution.

Maoist chief Prachanda, who is expected to head a coalition government led by the CPN-Maoist, had expressed his desire to meet Gyanendra to persuade him to quit the royal palace.

He, however, said the king would be allowed to do business or other activities, including politics, if he desired so.