Kamal Thapa is suspected of fomenting ethnic unrest in the country’s southeast.
The Madhesi want greater autonomy for Terai and have demanded more positions in parliament, the government, security agencies and political parties.
Sitaula accused supporters of Nepal’s King Gyanendra of trying to exploit the group’s grievances to derail the peace pact with the Maoists.
The agreement in November ended a 10-year civil war between the government and Maoist fighters.
The king was stripped of his powers after mass protests ended his absolute rule last April.
Sitaula said: “I feel the king [is behind a] conspiracy to try to create the feeling that there can be no peace in Nepal without royal rule.”
More than 100 people were wounded in the unrest over the last two weeks and authorities have placed several towns in Terai under curfew.
On Monday, Hridayesh Tripathi, Nepal’s commerce minister and a member of the Madhesi community, resigned, saying the governing alliance was not serious about addressing their grievances.
|The Madhesi people want greater
autonomy for the southern Terai region
Despite making up about 30 per cent of Nepal’s population of 26 million, Madhesis occupy only about 15 per cent of seats in parliament.
They are ethnically, culturally and linguistically closer to people living in the neighbouring Indian states of Bihar and Uttar Pradesh than to Nepalis living in the hills and mountains.
The Maoists, who are due to join the interim government next month, want the monarchy abolished.
The assembly will also decide whether the country is to have a federal structure as demanded by the Madhesis.