Nepal's President Ram Baran Yadav has directed Army Chief Gen Rukmangad Katawal, sacked by Prime Minister Prachanda, to continue in office in a face-off between the two leaders that threatens to escalate the political crisis and derail the peace process.
Dismissing as "ridiculous" India's fears that Nepal was moving closer to China, Prime Minister Prachanda has, however, said there was a "crisis of confidence" between him and the Indian establishment.
Security expert B Raman on the emerging situation in Nepal after its PM Prachanda resigned.
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