On Wednesday, the NC suggested that Puspha Kamal Dahal should lead a national unity government provided the fundamentals of the peace process move forward. Sources say the NC assured Dahal of its support in forming a national unity government if he agreed to the number of Maoist fighters to be integrated, the modality, rank harmonisation and rehabilitation package.

"We considered the gravity of the situation and made conditions more flexible than before," said a NC leader. "There is no favourable environment within my party at the moment so we may even consider an NC candidate just in case we are not able to lead the government," the leader quoted Dahal as saying. The NC is said to have told him that the party would name the candidate "within four hours" if it is to lead the government.

Earlier, the Maoists had proposed Baburam Bhattarai to lead the national unity government. He was proposed by vice chairman Narayan Kaji Shrestha after it was approved by Dahal and was seconded by Mohan Baidya. Sources say Bhattarai's name was proposed in a meeting of office bearers held few days back and that Dahal put forward his name after being pressurised by the two deputies to change his working style in the party and make the leadership inclusive.

After the office bearers' meeting at Dahal's residence on Tuesday, Shrestha told reporters that the party would hold talks with other political parties regarding Bhattarai's candidacy and implementation of the five-point agreement.

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