Kathmandu  - Nepal's 8-month-old Maoist-led government collapsed Monday when Prime Minister Pushpa Kamal Dahal resigned amid an escalating political crisis over his government's decision to sack the army chief.

Dahal, who led the former rebels during their communist insurgency, announced his resignation in a nationally televised message to the nation.

"To give outlet to the current difficult situation and to create a conducive atmosphere to save the peace process, nationalism and democracy, I announce my resignation from the government I lead," he said.

He quit after President Ram Baran Yadav, a member of the Nepali Congress party, on Sunday night ordered General Rupmangat Katuwal to remain as the head of the country's army, rejecting the Maoist government's decision to sack him several hours earlier.(dpa)