Prachanda, whose party had been saying that the Nepal government would not survive beyond three months, Friday called the ruling alliance illegal and demanded it rectify the 'unconstitutional' step taken by President Ram Baran Yadav.
The Maoist government fell in May after it tried to fire the chief of the army, Gen Rookmangud Katawal. The general was reinstated by the president.
The furious guerrilla party has since then kept parliament under siege and has been staging anti-government protests in the capital to pressure the prime minister into making concessions.
However, so far, the Nepal government has shown no sign of relenting.