Nepal Maoists warn talks may fail

Kathmandu: Nepal's Maoists said on Monday that peace talks with the Government were close to collapse over the contentious questions of the rebels surrendering their arms and the future of the monarchy.

"The talks are very close to collapse," deputy rebel chief Baburam Bhattarai told business leaders in Kathmandu.

"The dialogue process is stuck at a very sensitive stage," he added.

The Maoists and the Government agreed to a ceasefire in May after Nepal's King Gyanendra was forced to cede power to a multi-party administration.

The two sides agreed to set up an Interim Government and hold elections for a special assembly to decide the future of the monarchy.