Kathmandu: Nepal’s president has asked sacked army chief general Rookmangud Katawal to stay in his post, defying the Maoist government and thrusting the Himalayan republic deeper into political crisis.

The Maoists fired Katawal on Sunday, accusing him of disobeying instructions not to hire new recruits and refusing to accept the supremacy of the civilian government.

But President Ram Baran Yadav, who hails from an opposition party and is commander-in-chief of the army, called the move unconstitutional.

“The president has asked Katawal to continue to work as usual,” said the president’s spokesman, Rajendra Dahal. “The dismissal of the army chief is illegal and unconstitutional.

The crisis could wreck a 2006 peace pact that ended a decade-long civil war that pitted the army against the Maoists. The peace agreement ushered the Maoists into the political mainstream and they won an election last year.

It also brought about the downfall of Nepal’s royal family and the emergence of Nepal as a republic.

Two government parliamentary allies have withdrawn from the ruling coalition to protest against the dismissal, leaving the Maoists with a thin majority and possibly leading to a confidence vote in the government.

Maoist Prime Minister Prachanda is due to address the nation at 3 pm local (0915 GMT).

Katawal still remains in his office, an army official said, but the cabinet has already appointed general Kul Bahadur Khadka, next in line after Katawal, as acting chief of the 93,000-strong army.

The government criticised the President’s move.

“The President’s decision is against the constitution and meaningless because a new chief of the army has already been appointed by the cabinet,” said Om Sharma, an aide to Prime Minister Prachanda.

Fears of power grab

Members of the opposition Nepal Congress party burned tyres on the streets of Kathmandu shouting anti-Maoist slogans.

A military coup is unlikely in Nepal given that the army has showed little willingness to grab power in the past, analysts say.

But the president’s move underscores opposition to what many Nepali politicians fear is a creeping power grab by the former revolutionaries, who have been criticised for muzzling the press and using violence to intimidate opponents.

“I think the president sees that he is the only authority that can counter what he sees as the Maoist drive towards totalitarian rule,” said Kunda Dixit, editor of Nepali Times.

The Maoists accuse Katawal, who was due to retire in four months, of hiring 2,800 new recruits and reinstating eight generals without consulting the government.

The Maoists and the army have also faced off on the question of absorbing more than 19,000 former rebel fighters into the armed forces. Katawal had resisted, saying the army could not take in “indoctrinated” cadres.

The integration and rehabilitation of the former guerrillas, housed in UN monitored camps, is key to lasting peace in the Himalayan nation tucked between giants, China and India.

The Maoists came to power promising to create a “new Nepal” with social help for one of the world’s poorest countries. But a crippling shortage of electricity and the highest inflation in a decade have hampered economic growth, forcing industries to cut production by about 60%.

Nepal’s key economic and trade partner, India, is yet to formally comment on the latest developments, but media reports said New Delhi had asked Maoists not to fire Katawal.