In a sudden U-turn that could break the lingering political deadlock in Nepal, Maoists on Thursday decided to give up their claim on the post of president, paving the way for formation of a new government.

Following its Central Secretariat meeting in Kathmandu, the Communist Party of Nepal-Maoist party also announced that it has withheld its decision to quit the interim multi-party government by Thursday.

The Maoists, during the meeting, decided that the post of president should be given to a leader of civil society, sources close to the former rebels said.

However, the decision needs to be endorsed by their Central Committee meeting to be held on Sunday.

The former guerrillas had earlier threatened to quit the interim government led by prime minister G P Koirala if both the posts of president and prime minister were not given to them.

The Maoists' demand had thrown the country into political uncertainty as major parties including Nepali Congress and CPN-UML insisted that the two key posts should not be given to any single party.

The major parties had also demanded amendment to the Constitution before handing over power to the Maoists, who emerged as the single largest group in the historic April 10 Constituent Assembly election by bagging 220 seats.

The parties wanted inclusion of a provision according to which the government could be formed or dissolved by simple majority instead of the present requirement of a two-thirds majority.

"Our priority is not who will get the post of president, but implementing the seven-point agenda and to amend the Constitution so that a simple majority can form and dissolve the government," Nepali Congress general secretary Bimalendra Nidhi told PTI.

The seven-point agenda includes dismantling Maoists' military and semi-military structures, halting acts of intimidation, terror and extortion by the former rebels, returning land and property seized by them and dissolving parallel government and kangaroo courts of the ex-guerrillas.

"The Maoists being the largest party in the newly-elected assembly should take the initiative to build consensus and present a common minimum programme without which they cannot get our support in the formation of the new government," Nidhi said.

However, political observers believe that the decision made by the Maoists to withdraw their claim on the post of president would move ahead the peace process and clear the way for government formation.