The haggle over cabinet formation is a sideline. The real political dynamic right now is the new government's approach to the Maoists, the contours of which are becoming clearer, and the Maoist response, which remains difficult to assess at the moment.

As suspected, the present coalition has come in with a brief to radically re-alter the terms of agreement with the Maoists, even if it means risking the achievements of the past few years.

The defence minister's statement saying she has not heard of the term "integration" and that "PLA would be managed and rehabilitated on humanitarian grounds" is striking. This is not a casual remark and makes it clear that the army will call the shots in this dispensation.

Not only is the minister shifting goalposts here (like some Maoists did when they demanded wholesale integration with control and command) the government seems to perceive concessions on PLA as a favour it is doing for the Maoists.

Go back to the newspaper records of the days leading up to the peace accord in November 2006. It was preceded by a long stalemate over precisely these questions: what happens to PLA, how would cantonment arrangements work out, what will the final settlement be? There were too many ambiguities in that accord, which has left us with the present problems.

But the deal that was finally struck at that point was based on the balance of power between parties.

What is happening now is that the other parties feel, two-and-half years later, that they gave in too much. They regret allowing the Nepal Army and the 'People's Liberation Army' to be regarded almost as equal forces in the Agreement on the Monitoring of the Management of Arms and Armies (AMMAA).

It is conveniently forgotten that the deal was necessitated by the fact that the Maoists were strong. The PLA had played a key role in ousting the king, and any political compact had to take into account their concerns.

Of course, the former rebels could take advantage because the others (especially India and the NC) were so careless and took things for granted. But now that they have a chance after seeing Maoists rule, the others want to re-write the rules.

This is based on the calculation that the Maoists have, in the post-Katawal situation, got weaker. Non-Maoists are not willing to concede a single inch any more. So the line goes: no to integration in the army, status quo on the president and army chief's position, rejection of Maoist constitutional proposals on state structure and federalism and a total crackdown on Maoists if they attempt any violence.

For their part, the Maoists institutionally, and Pushpa Kamal Dahal personally, are in a bit of a spot. Going back to the jungle is out of the question. So is cooperating with what they have termed as a 'puppet' government. There is a sense of being under siege, which is why they are hitting out at everyone: the president, speaker, army, judiciary, parties, and of course, India.

The Maoists have little choice but to stay on in the process, even as their rivals seek to create disillusionment in their ranks, and go back on past commitments. But if anyone thinks the Maoists will quietly accept their fate, that would be naive.

The Maoists are focussing on a dual-strategy. The first is strengthening the organisation. The reshuffling of the PLA chain of command is a step in this direction, so is the focus on the district units. This organisational machine will then be geared towards escalating protests to cripple the government's functioning. They will engineer violence if necessary, but try to keep it low-key to avoid a backlash.

The second step seems to be reconnecting with the ethnic sentiment. There has been a growing distance between the Maoists and ethnic backers who felt Maoists were reneging on their commitments. With so many forces ganged up against them, the Maoists can't afford to lose the support of the ethnic groups they mobilised during the war.

They lost the initiative in the Madhes, Limbuwan and the Tharu belts. Going back to the ethnic agenda will help them score points on the ground, as well as make life hell for the UML, the most unsympathetic party on the question of marginalised communities.

Things will get a lot more unstable before they get more stable.