KATHMANDU, Feb 14: Nepal’s jailed former prime minister Sher Bahadur Deuba was freed from prison on Monday after the supreme court dissolved the controversial anti-graft panel which jailed him, striking a blow to King Gyanendra.

“He has been released. He is at home and in good health,” Bicky Deuba, the former prime minister’s nephew, told Reuters.

The Royal Commission for Corruption Control, formed last year after King Gyanendra sacked Mr Deuba and assumed absolute power, had jailed the former premier after accusing him of embezzling $5.3 million in awarding a contract to supply drinking water to Kathmandu.

Deep Kumar Upadhyay, a central committee leader of Mr Deuba’s Nepali Congress (Democratic) Party, confirmed the former prime minister had been released, as did party spokesman Minendra Rijal.

Earlier in the day, the supreme court dissolved the controversial anti-corruption panel, saying it was established ‘against the spirit of the constitution’.

It also outlawed all decisions taken by the commission, paving the way for Mr Deuba’s release.

Mr Deuba was sacked by King Gyanendra last year for failing to curb a Maoist insurgency which has killed over 13,000 people since it began in 1996.

However, analysts say the king’s one-year rule had not improved the situation.

GYANENDRA’S FUTURE: Maoist leader Prachanda said in an interview broadcast on Monday that King Gyanendra would ultimately be exiled or executed because he had closed the door to any political compromise since seizing absolute power.