Kathmandu- Nepal's political parties were involved in intense discussions Saturday against a deadline for the formation of a new government set by the president.

President Ram Baran Yadav set midnight Saturday as the deadline for parties to form a "national consensus government" after Monday's collapse of the Maoist-led government.

However, Nepal's main political stakeholders have been unable to make headway. The Maoists have reiterated their position that they would not join any government without the president first revoking his decision to reinstate army chief Rukmangat Katuwal who was sacked by Maoist Prime Minister Pushpa Kamal Dahal.

"We are discussing ways to form a national government and we would want the Maoists to be a part of it," Raghuji Pant of Communist Party of Nepal - Unified Marxist-Leninist (CPN-UML) said.

The Nepali Congress Party backs the CPN-UML but wants a coalition that excludes the Maoists. It has been unable to convince other key parties like the Madhesi Janadhikar Forum, which said it remained undecided and internal discussions were continuing.

Political analysts say a coalition with the Maoists would not be stable and could lead to widespread protests by Maoist supporters.

On Monday, Dahal resigned as prime minister over a power struggle with the president, plunging the country into political crisis which is threatening to disrupt Nepal's two-and-a-half-year-old peace process. (dpa)