According to Article 298 (3) of the Constitution, the Prime Minister shall be elected by a majority of all the members of the Legislature-Parliament, if parties fail to pick a consensus candidate for the post of Prime Minister within a week.
The president issued the call as per Article 298 (3) of the Constitution after the seven-day deadline given to form a consensus government ended today without any result, the Office of the President said.
President Bhandari initiated the Constitutional process to form the new government after Prime Minister Pushpa Kamal Dahal 'Prachanda' resigned on May 24 after a brief stint of nine months, honouring a power sharing understanding with the ruling coalition partner Nepali Congress to hand over the country's leadership to the largest party in Parliament.
Prachanda resigned as per a deal reached in July-August last year with Nepali Congress President Sher Bahadur Deuba, who is expected to take over as the prime minister.
Prachanda is the only Communist leader to become the Prime Minister of Nepal twice.
During his first tenure as the prime minister from 2008 to 2009, Prachanda was not on good terms with India.
However, during his second tenure, he had chosen India as his first overseas destination rather than China.
Indo-Nepal ties, which were strained during Prachanda's predecessor K P Oli's regime, also improved under the Maoist leader's second stint.
Prachanda was to hold office till local polls were held and remaining two elections - provincial and central - were to be conducted under Deuba.
Local-level elections could not be held after 1997 largely as a result of the decade-long Maoist insurgency that claimed more than 16,000 lives in Nepal.
The elections should be held in every five years but due to the political instability, they were halted since May 1997.
Prachanda, who led the Maoists during the armed struggle from 1996 to 2006, is credited with transforming the rebel movement into a political party after a 2006 peace deal.
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