In a letter sent to the Parliament, the President asked the parties to begin the process of electing a new Prime Minister on a majority basis in accordance with the Constitution.
The call by the President to form a majority government was issued after the deadline given to the parties to form a consensus government expired yesterday without any outcome.
Bhandari had on July 25 called on all the political parties to elect a new Prime Minister within a week based on consensus to end the political instability in the country, a day after premier K P Oli resigned.
CPN-Maoist president Pushpa Kamal Dahal 'Prachanda' is expected to become Nepal's 39th Prime Minister with the support of largest party Nepali Congress, the Madhesis and other fringe parties if there is no dramatic development.
Oli resigned last month ahead of a no-confidence vote, plunging the country into a fresh political turmoil after last year's crippling Madhesi protests against the new Constitution.
Oli, who became prime minister last October heading Nepal's eighth government in the past 10 years, was facing a no-trust motion after the Maoists withdrew support from the coalition government.
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