Nepal's parliament has elected the leader of the country's largest and oldest political party as prime minister, in an attempt to ease political instability.

Sushil Koirala, 76, received two-thirds of votes on Monday in the 601-member parliament with the support of the second largest party, the Communists, and some other smaller groups.

The move was welcomed with applause inside the assembly hall as hundreds of Koirala's supporters stood outside the building.  

Koirala, who spent six years in jail and nearly 20 years in exile in India for opposing the autocratic rule of the king, is scheduled to be sworn in by the president later on Monday. He led his party for the past four years.

The new PM is also likely to announce a small cabinet and continue negotiations with other political parties to join his coalition government.

None of the political parties won a majority in the November 19 national election, but the two largest parties agreed on Sunday to form a coalition. It was not known if other parties would join.

"Our party will shoulder the responsibility to conclude the peace process and produce a democratic constitution," Koirala said ahead of the vote. "We will take the lead in preparing a draft of the new constitution."

The Himalayan country has stumbled through the last five years with parliamentary paralysis.

A constitution was supposed to have been written by the last Constituent Assembly, which was elected in 2008 following the end of a 10-year Maoist insurgency and the overthrow of the centuries-old monarchy. But the assembly was riven by infighting and never finished its work.

Source: AP