Nepal's King Gyanendra, bowing to popular pressure, yesterday announced that he was handing back all executive power to the people.
In an address to the nation following over two weeks of anti-king protest demonstrations during which over a dozen people were shot dead, the 59-year old Nepalese monarch said: "We ask the seven agitating political party alliance to recommend the name of the person to become prime minister."
The king seized absolute power in February last year asking for three years to bring the derailed Nepalese multi-party democracy back on track.
More than 100,000 pro-democracy protesters had earlier defied a government curfew and filled the streets on the outskirts of Nepal's capital, as the US ambassador warned that the king's regime could be nearing collapse.
Three separate groups of marchers converged on an area on the western edge of Kathmandu called Kalanki, where police shot three demonstrators dead on Thursday and wounded dozens more.
A reporter estimated the crowd at more than 100,000; independent Kantipur television said there were about 150,000.
They faced off against security forces that had ringed the city issued with shoot-on-sight orders against anyone who tried to enter the curfew zone.
As the tension grew, so did the international pressure on the king.
Meanwhile, two senior opposition leaders involved in negotiations with communist rebels were arrested as they tried to return to Kathmandu, said Amrit Bohara of the Community Part of Nepal.
The two men, Jhala Nath Khanal and Bamdev Gautam, both leaders of the party, have been important conduits in negotiations between Nepal's seven main opposition parties and the Maoist insurgents who control much of the countryside.