Bowing to intense pressure from Hindu groups and political parties both at home and abroad, Nepal's Maoist government on Wednesday reversed its decision to replace the Indian priests at the Himalayan country's most revered Pashupatinath temple in Kathmandu with the local Brahmins.

The announcement was made by Prime Minister Prachanda during a special address to Parliament telecast live by the state-run television.

He said the appointment of the two local priests by the Pashupati Area Development Trust (PADT), of which he is a patron too, in place of the Indian priests has been cancelled.

Prachanda said the trust has been instructed to begin the process of selecting new priests through open competition, which was the major demand of the agitating priests and the local people.

"I have cancelled the appointment of the new priests immediately and urged the old (Indian) priests to continue with the religious ceremony," he said.

Earlier, three Indian priests had submitted their resignation, including chief priest Mahabaleshwor Bhatta. "I have requested them to continue their job till new priests are appointed through proper procedure," Prachanda said.

He said now the 'Nitya Puja', the regular ritual of worshipping at the temple, will continue from tomorrow. "I have requested the Indian priests to resume their duty from Thursday as the Nitya Puja should not be disrupted."