Prime Minister Jhalanath Khanal Nepal has stepped down, admitting he is unable to make progress in forging a political consensus.
Mr Khanal submitted a letter of resignation to the president late on Sunday after talks with other party leaders collapsed. He had been prime minister for 6½ months.
He was the third prime minister since elections to the constituent assembly in May 2008.
A BBC correspondent it is unclear who will succeed him.
The government and the opposition have failed to agree on a new constitution after 10 years of civil war.
One of the key sticking points has been the fate of former Maoist fighters.
An extended term of the assembly, which doubles as parliament, is due tp expire on 31 August.
