The three-member committee formed to lead the struggle movement that will start if the government fails to heed the demand by Wednesday began chalking out protests that include public rallies and shutdowns.

The Maoists are also gearing up to lay siege to parliament once again.

This year, they had brought the house to a grinding halt for nearly two months over the same issue.

'We allowed the house to resume so that the budget could be passed,' Bhattarai said. 'This government has no right to stay in power.'

Prime Minister Nepal, already grappling with a virulent diarrhoea epidemic in the west, which has killed over 200 people and affected more than 50,000 people, is ill-equipped to face a renewed Maoist attack.

His less than three months old government is already reeling under a garbage disposal crisis, the spectre of drought due to a late and weak monsoon, and disruptive protests by various groups ranging from ethnic communities to underpaid teachers.

The fresh Maoist threat comes ahead of Nepal's official visit to India scheduled from Aug 18.

If the former rebels put their threat into action, both Nepal's India visit as well as the long-term goal of drafting a new constitution by May 2010 are likely to come unstuck.