KATHMANDU: Nepal’s government scrapped payments to King Gyanendra and vowed to nationalise royal property in a budget presented to parliament on Thursday that deals a major blow to the embattled monarch.

The king has been under pressure since fiercely-republican Maoists signed a peace deal with mainstream parties last year and entered Kathmandu's corridors of power. The latest government move adds to signs that he may soon be removed.

Finance Minister Ram Sharan Mahat's $2.6 billion budget for the Himalayan nation, one of the world's poorest, contained no provisions for the royal palace.

In last year's budget, the annual royal household allowance had already been cut from $10.6 million to $3 million.Mahat also announced that royal properties — dozens of grand palaces and huge parks — would be seized “in the national interest.” He added that the “nationalisation of the properties of the royal palace will be implemented on a time-bound basis.” With former Maoist rebels in government and parliament, analysts said it was hardly surprising that the budget had pulled the financial plug on the palace.

“The government has not allocated any money in this year’s budget for the king... the royal budget has been totally scrapped,” said Prem Khanal, a senior business reporter at the English-language Kathmandu Post newspaper.—AFP