"The talks are very close to collapse," the deputy rebel chief, Baburam Bhattarai, told a news conference in Kathmandu on Monday.

 

"The dialogue process is stuck at a very sensitive stage."

 

The Maoists and the government agreed to a ceasefire in May after the king of Nepal, Gyanendra, was forced by weeks of street protests to cede power to a multi-party administration.

 

The two sides agreed to set up an interim government and hold elections for a special assembly to decide the future of the monarchy.

 

Disarming

 

But talks have foundered over the rebels' refusal to give up their weapons ahead of those elections.

 

Instead, they say the mainstream political parties should honour a deal made last year that rebel weapons should be placed under "international supervision" during those elections, if the Nepal Army also placed its arms under supervision.

 

Political parties feel this arrangement will give the rebels the ability to intimidate voters in large areas of the countryside where they hold sway.

 

"We will not surrender our arms, we will never do it until the elections to the constituent assembly are held," Bhattarai said.

 

"The government is trying to delay the talks by insisting that we should give up our arms."

 

Republic v monarchy

 

Bhattarai reiterated the Maoists' insistence that the monarchy should be abolished and a republic established.

 

But despite past assurances that the rebels would accept whatever the constituent assembly decided, he took exception to recent remarks by the Nepalese prime minister, Girija Prasad Koirala, in favour of a ceremonial monarchy.

 

"We caution and warn the prime minister that we may have to leave him if he continues to protect the monarchy - and that protest will not only finish the king, it will also finish all those who are siding with the monarchy," Bhattarai said.

 

On Sunday, Koirala said the king should retain a ceremonial role and be given some "space" in the Nepali political system.